Marathon Petroleum Corporation (NYSE: MPC) was added back to The Energy Strategist portfolio on October 26, 2016, and it has performed well since. The share price has risen 10% above our $50 buy limit, but the company’s cash flow and balance sheet are steadily improving.

Over the past year, MPC was the 3^rd best performer among all refiners and the top performer among the major refiners with a total shareholder return (TSR) of 50.4%. MPC’s Gulf coast refineries can access the lucrative export markets in Latin America, while its in-house filling stations help limit the rising cost of ethanol blending quotas.

There has been some concern that Marathon may be vulnerable to sanctions against Venezuela, but data from the Energy Information Administration show that Marathon only purchased 2.7 million barrels of Venezuelan crude in 2016. This was only 1.1% of the crude that Venezuela shipped to U.S. refineries, but more importantly represented less than half a percent of Marathon’s crude oil last year. (For more information on the situation with Venezuela, see Impact Of Potential Oil Sanctions On Venezuela).

Sanctions may cause the refining sector to dip this week, but I believe that any such drop will be fleeting. There may be a temporary perception issue with the refiners, but in the case of Marathon, it is unlikely to affect the bottom line. Marathon releases earnings on July 27 and analysts are projecting strong year-over-year earnings growth (as has been the case for several straight quarters).   

Marathon’s buy limit is increased to $55.