The oil benchmarks recently registered their highest closes since October 2014. And because the global supply crunch is far from resolution and OPEC is sticking to its plan to increase output only gradually, analysts expect oil prices to remain elevated. So, both Marathon Petroleum (MPC) and Valero Energy (VLO) are poised to benefit from the industry tailwinds. But which of these stocks is a better choice now? Read more to find out.Marathon Petroleum Corporation (NYSE:MPC) in Finlay, Ohio, engages primarily in refining, marketing, retailing, and transporting petroleum products in the United States. It operates in two segments: Refining & Marketing; and Midstream. In comparison, San Antonio, Tex.-based Valero Energy Corporation (NYSE:VLO) manufactures, markets, and sells transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, and internationally. It operates through three segments: Refining; Renewable Diesel; and Ethanol.
On October 26, Brent futures rose to $86.40 per barrel, while U.S. West Texas Intermediate (WTI) crude settled at $84.65, marking their highest closes since October 2014. Analysts expect oil price strength to continue through year’s end because the global supply crunch shows no signs of subsiding. Furthermore, OPEC+ has also rejected calls to raise its output faster. Analysts expect oil prices to cross the $90 per barrel mark soon. "A jump to $90 oil seems likely," noted Edward Moya, a senior market analyst at OANDA. Given the multi-year-high oil prices, both MPC and VLO should generate substantial returns.
But while MPC’s shares have gained 28.7% in price over the past six months, VLO has gained 17.8%. In terms of their past year’s performance, MPC is the winner with 128.2% gains versus VLO’s 97%. Also, MPC’s 64.9% gains year-to-date compare with VLO’s 46.2% returns.