New ‘Skimming’ Trades

The refiner Marathon Petroleum (NYSE: MPC) is an attractive short-term bet again (more on that below.)

 MPC Nov. 18 $45 calls were recently offered at $1.30; buy below $1.70.

MPC Jan. 20 $40 calls were recently offered at $5.60; buy below $6.

We may update these trades following tomorrow morning’s quarterly results.

We’re also taking advantage of the recent pullback to leverage the upside of our top Best Buy.

Energy Transfer Equity (NYSE: ETE) Dec. 16 $15 calls were recently offered at $1.37;  buy below $1.75

ETE Nov. 18 $16 calls were recently offered at $0.53; buy below $0.70

Signing Up for Marathon

The traditional fall “turnaround” season is delivering a real turnaround for select refining stocks, as refinery shutdowns for maintenance curb supply at a time of strong demand for refined products.

Refining margins on the Gulf and East coasts have begun to lift from low levels as a result, and have more room for growth.

After avoiding this slumping sector for the last year we’re restoring Marathon Petroleum (NYSE: MPC) to the Growth portfolio. MPC’s Gulf coast refineries has can access the more lucrative export markets in Latin America, while its in-house filling stations chain will help limit the rising cost of ethanol blending quotas.

MPC’s affiliated MPLX (NYSE: MPLX) logistics MLP could yet prove the ace up its sleeve, since the MarkWest midstream business MPLX acquired last year sits atop two particularly prolific U.S. shale gas formations, the Marcellus and the Utica.

We’re adding MPC to the Growth Portfolio with a buy limit of $50 ahead of its quarterly earnings report tomorrow morning.