Over the short term it appears Marathon Petroleum should do well, and the company apparently believes that also, recently boosting its quarterly dividend 40 percent to $0.35 a share.
But for the next five years Marathon may come under strong pressure from what could be a big drop in margins. Wood Mackenzie Senior Energy Research Analyst Jonathan Leitch said the margins of the company could fall as much as 40 percent during that period.
This is because of the lighter crude oil being extracted from shale plays around the United States, which is the primary market served by the oil refiner.
Marathon Petroleum has refinery exposure of approximately 50 percent in the heavy crude market, which is the source behind the probably pressure on its margins going forward.
At this time there is an oversupply of refining capacity in that segment of the market.
This shouldn't affect the performance of the stock in the very short term, but over time it is something that must be carefully watched.
Marathon Petroleum closed Friday at $47.04, climbing $1.22, or 2.66 percent.