Marathon Petroleum shares fall 3.22% to $430.39 amid diesel-ban concerns

Key Facts

Marathon Petroleum shares closed at $430.39 on Nov. 2, down $14.34, or 3.22%, from the previous close of $444.73 on Oct. 30, according to FinancialContent data. The decline coincided with a broader retreat in the energy sector and crude prices, according to a Reuters report via Investing.com. Available material does not establish that there was a new development on Nov. 2 regarding a ban on diesel exports; confirmed comments about considering one date back to September. On Sept. 22, President Donald Trump said he supported the idea of banning U.S. diesel exports, while Treasury Secretary Scott Bessent confirmed that the administration was weighing the merits of a full or partial ban, according to Axios. Trump then said on Oct. 2 that the United States would not implement the ban, after the Group of Seven announced a plan to release 100 million barrels of oil and fuel products, according to the Associated Press.

Refiners’ sensitivity stems from the United States’ role as a diesel supplier and limited domestic inventories. U.S. exports reached a record 1.6 million barrels per day in August, compared with about 1 million barrels per day in February, according to a Reuters report. At the same time, road diesel inventories stood at 96.97 million barrels, about 13% below the five-year seasonal average, according to the same report, published in September. U.S. refinery utilization was about 97% at the time, leaving limited room to quickly increase production. The average U.S. diesel price also reached a record $6.5107 per gallon on Sept. 22, according to AAA as cited by Reuters.

A ban could leave as much as 1.5 million barrels per day of diesel in the U.S. market, according to an estimate by S&P Global analysts published on Sept. 23. The analysts said disposing of the surplus could prompt refiners to cut crude processing by about 1.9 million barrels per day, or nearly 12%, potentially reducing utilization to 80%-82%. Lower processing would also mean producing less gasoline, jet fuel and petrochemical feedstocks. The United States could shift from a net gasoline exporter to a limited net importer, according to S&P Global’s estimate. Reuters warned that an export ban could lower diesel prices in the United States but raise them globally and squeeze U.S. refining margins.

The stock moved lower on Monday amid a selloff in the energy sector: the S&P 500 energy index fell 2.1%, Brent futures dropped 6.2% to $106.45 per barrel, and West Texas Intermediate crude fell 6.5% to $97.40, according to Reuters via Investing.com. The report put Marathon Petroleum’s decline at 2.6%, while daily closing data showed a drop of 3.22%. In an earlier development that weighs against the prospect of an imminent ban, a White House official had described a report about considering a 90-day ban as “fake news,” according to Reuters. The proposed ban would have been the first restriction on U.S. energy exports since the oil ban ended in 2015, according to the report. In October, the national average diesel price rose from the record $6.53 per gallon on Sept. 22 to nearly $6.28 on the Friday before the AP report, compared with about $3.68 during the same period a year earlier.

The AP reported in October an announcement of an immediate supply of more than 300,000 tons of Russian diesel to the United States, followed by an additional 500,000 tons in November and then 4 million tons later; experts, however, said the effect of these volumes on prices would be limited. The next key event for the company’s investors is Marathon Petroleum’s third-quarter earnings conference, scheduled for Nov. 3 at 11:00 a.m. Eastern time, according to the investor relations website. The U.S. Energy Information Administration’s weekly report is usually released on Wednesday at 10:30 a.m. Eastern time. The agency’s schedule lists the release of data for the week ended Nov. 6 on Nov. 12 at 12:00 p.m. because of the Veterans Day holiday. The schedule does not list a similar exception for Nov. 4, which remains the next regularly scheduled weekly release date.