Author asks why MPC is not a huge opportunity after building a ~25% position, citing its position as the largest U.S. refiner, Venezuelan crude access, expansion, buybacks, and distillate supply squeeze.
MPC — LONG MPC is the largest U.S. refiner and is uniquely positioned to benefit from eventual U.S. access to Venezuelan crude because its Gulf Coast refineries were built for heavy sour crude. The company is also the only refiner expanding capacity and consistently buying back shares. The author views lower oil prices as favorable for MPC as a buyer, while diesel and distillates face a U.S. supply squeeze.
First of all, many of its refineries are located on the Gulf Coast, primed to receive Venezuelan crude. In fact, they were built specifically for it. They are the best suited refiner for sour, heavy crude, which is the vast majority of what Venezuela has. Secondly, they're the only refiner that's expanding its factories to accommodate more volume. And lastly, they've been regularly and consistently buying back shares, suggesting high confidence in the business from the company side.