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3 Refining Stocks Up More Than 100% YTD With Further Upside Potential
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Key Takeaways
VLO, PBF and MPC have more than doubled YTD as tight fuel markets continue to support refining margins.
Low inventories, refinery outages and healthy transportation-fuel demand are keeping product markets tight.
Refining conditions may stay favorable as damaged capacity and low inventories take time to recover.
Oil and Gas - Refining and Marketing stocks have been among the strongest performers in 2026, helped by a favorable environment for refiners. Conflicts in the Middle East and Russia have disrupted refinery operations and reduced the supply of gasoline, diesel and jet fuel globally. At the same time, demand for transportation fuels has remained healthy. This combination of limited supply and steady demand has strengthened refining margins. Despite the sharp year-to-date rally, the downstream industry backdrop remains supportive, as rebuilding fuel inventories and restoring damaged refining capacity could take considerable time.
Against this backdrop, Valero Energy (VLO - Free Report) , PBF Energy (PBF - Free Report) and Marathon Petroleum (MPC - Free Report) stand out. All three stocks have more than doubled year to date, but favorable conditions across the refining and marketing space suggest that their strong run may still have further room to continue.
YTD Price Performance
Image Source: Zacks Investment Research
Why the Downstream Space Remains Attractive
Less Refining Capacity is Keeping Fuel Supply Tight:Conflicts in the Middle East and Russia have forced several refineries to reduce or halt operations. Global planned and unexpected refining outages have risen well above normal levels, while some facilities have suffered physical damage that could take considerable time to repair. With fewer refineries available to turn crude oil into gasoline, diesel and other fuels, product supplies are likely to remain tight. This should continue to support the broader downstream and refining and marketing space.
Fuel Inventories are Low While Demand Remains Healthy:Global supplies of gasoline, diesel and other refined products in storage have fallen considerably and remain well below normal levels. At the same time, demand for gasoline, diesel and jet fuel continues to hold up well in both U.S. and international markets. This combination of low inventories and healthy demand is keeping fuel markets tight. As a result, refiners should continue to benefit from favorable product prices and supportive refining and marketing margins.
Favorable Conditions Could Last Beyond the Current Disruptions:The strength in the downstream industry may not disappear quickly even if geopolitical tensions ease. Fuel inventories are expected to take considerable time to return to normal, while damaged refining infrastructure could keep global capacity constrained. Industry expectations also point to a stronger-than-usual refining environment extending into 2027, supported by tight supply-demand conditions and the rising cost of adding or operating refining capacity. Greater availability of Canadian and Venezuelan crude could provide an additional advantage for U.S. refiners.
The Rally May Not Be Over Yet
Despite having jumped more than 100% so far this year, Marathon Petroleum, Valero and PBF continue to carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). With fuel supplies tight, inventories low and demand holding up well, the refining and marketing space still has a favorable outlook. These conditions suggest that the three stocks could remain attractive choices even after their substantial gains. You can see the complete list of today’s Zacks #1 Rank stocks here.
Valero Energy: Valero Energy is a major downstream energy company focused on refining, renewable diesel and ethanol. Its refining network has about 2.5 million barrels per day of crude capacity, with a large presence on the U.S. Gulf Coast. Valero also operates 12 ethanol plants and participates in renewable diesel through Diamond Green Diesel, giving it a broader fuels portfolio.
Valero’s flexible refineries can process different crude types and are supported by logistics and marketing operations. This should help the #1 Ranked company gain from low fuel inventories, limited excess refining capacity and steady transportation-fuel demand. Access to U.S., Canadian and Venezuelan crude provides an advantage in the current market.
Over the past 60 days, the Zacks Consensus Estimate for Valero Energy’s 2026 earnings has moved up 31.1% and indicates 283.6% growth from the year-ago reported number.
PBF Energy:PBF Energy has refining operations across the East Coast, Mid-Continent, Gulf Coast and West Coast. Its system includes facilities such as Torrance, Martinez, Chalmette, Paulsboro and Toledo, supported by logistics operations. PBF also has exposure to renewable diesel through its St. Bernard Renewables joint venture.
This regional footprint allows PBF to serve several fuel markets and respond to changing supply conditions. The Zacks #1 Ranked company should benefit from tight gasoline, diesel and jet-fuel inventories, reduced global refining capacity and healthy demand. Management is also working to improve refinery reliability, energy efficiency and costs, which could help it capture more value from strong refining margins.
PBF Energy’s expected EPS growth rate for three to five years is currently 56%, which compares favorably with the industry's growth rate of 31%. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2026 earnings has gone up 67.8%.
Marathon Petroleum: Marathon Petroleum is a U.S. downstream energy company with a large refining and marketing system spread across the Gulf Coast, Mid-Continent and West Coast. Its operations are supported by extensive crude pipelines and logistics, while midstream unit MPLX adds a sizeable business. Marathon Petroleum also has renewable diesel operations, giving it exposure beyond traditional fuels.
The company is well-positioned in today’s tight refining market because its system can process advantaged crude and adjust production toward higher-value fuels. Low gasoline and diesel inventories, strong demand and reduced global refining capacity should support margins. Its scale, flexibility and integrated network also help MPC capture opportunities across different regions.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 49.3%. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2026 earnings has gone up 41.6%. MPC carries a Zacks Rank of 2.
View the Zacks #1 Rank List
Image: Bigstock
3 Refining Stocks Up More Than 100% YTD With Further Upside Potential
Key Takeaways
Oil and Gas - Refining and Marketing stocks have been among the strongest performers in 2026, helped by a favorable environment for refiners. Conflicts in the Middle East and Russia have disrupted refinery operations and reduced the supply of gasoline, diesel and jet fuel globally. At the same time, demand for transportation fuels has remained healthy. This combination of limited supply and steady demand has strengthened refining margins. Despite the sharp year-to-date rally, the downstream industry backdrop remains supportive, as rebuilding fuel inventories and restoring damaged refining capacity could take considerable time.
Against this backdrop, Valero Energy (VLO - Free Report) , PBF Energy (PBF - Free Report) and Marathon Petroleum (MPC - Free Report) stand out. All three stocks have more than doubled year to date, but favorable conditions across the refining and marketing space suggest that their strong run may still have further room to continue.
YTD Price Performance
Image Source: Zacks Investment Research
Why the Downstream Space Remains Attractive
Less Refining Capacity is Keeping Fuel Supply Tight:Conflicts in the Middle East and Russia have forced several refineries to reduce or halt operations. Global planned and unexpected refining outages have risen well above normal levels, while some facilities have suffered physical damage that could take considerable time to repair. With fewer refineries available to turn crude oil into gasoline, diesel and other fuels, product supplies are likely to remain tight. This should continue to support the broader downstream and refining and marketing space.
Fuel Inventories are Low While Demand Remains Healthy:Global supplies of gasoline, diesel and other refined products in storage have fallen considerably and remain well below normal levels. At the same time, demand for gasoline, diesel and jet fuel continues to hold up well in both U.S. and international markets. This combination of low inventories and healthy demand is keeping fuel markets tight. As a result, refiners should continue to benefit from favorable product prices and supportive refining and marketing margins.
Favorable Conditions Could Last Beyond the Current Disruptions:The strength in the downstream industry may not disappear quickly even if geopolitical tensions ease. Fuel inventories are expected to take considerable time to return to normal, while damaged refining infrastructure could keep global capacity constrained. Industry expectations also point to a stronger-than-usual refining environment extending into 2027, supported by tight supply-demand conditions and the rising cost of adding or operating refining capacity. Greater availability of Canadian and Venezuelan crude could provide an additional advantage for U.S. refiners.
The Rally May Not Be Over Yet
Despite having jumped more than 100% so far this year, Marathon Petroleum, Valero and PBF continue to carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). With fuel supplies tight, inventories low and demand holding up well, the refining and marketing space still has a favorable outlook. These conditions suggest that the three stocks could remain attractive choices even after their substantial gains. You can see the complete list of today’s Zacks #1 Rank stocks here.
Valero Energy: Valero Energy is a major downstream energy company focused on refining, renewable diesel and ethanol. Its refining network has about 2.5 million barrels per day of crude capacity, with a large presence on the U.S. Gulf Coast. Valero also operates 12 ethanol plants and participates in renewable diesel through Diamond Green Diesel, giving it a broader fuels portfolio.
Valero’s flexible refineries can process different crude types and are supported by logistics and marketing operations. This should help the #1 Ranked company gain from low fuel inventories, limited excess refining capacity and steady transportation-fuel demand. Access to U.S., Canadian and Venezuelan crude provides an advantage in the current market.
Over the past 60 days, the Zacks Consensus Estimate for Valero Energy’s 2026 earnings has moved up 31.1% and indicates 283.6% growth from the year-ago reported number.
PBF Energy:PBF Energy has refining operations across the East Coast, Mid-Continent, Gulf Coast and West Coast. Its system includes facilities such as Torrance, Martinez, Chalmette, Paulsboro and Toledo, supported by logistics operations. PBF also has exposure to renewable diesel through its St. Bernard Renewables joint venture.
This regional footprint allows PBF to serve several fuel markets and respond to changing supply conditions. The Zacks #1 Ranked company should benefit from tight gasoline, diesel and jet-fuel inventories, reduced global refining capacity and healthy demand. Management is also working to improve refinery reliability, energy efficiency and costs, which could help it capture more value from strong refining margins.
PBF Energy’s expected EPS growth rate for three to five years is currently 56%, which compares favorably with the industry's growth rate of 31%. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2026 earnings has gone up 67.8%.
Marathon Petroleum: Marathon Petroleum is a U.S. downstream energy company with a large refining and marketing system spread across the Gulf Coast, Mid-Continent and West Coast. Its operations are supported by extensive crude pipelines and logistics, while midstream unit MPLX adds a sizeable business. Marathon Petroleum also has renewable diesel operations, giving it exposure beyond traditional fuels.
The company is well-positioned in today’s tight refining market because its system can process advantaged crude and adjust production toward higher-value fuels. Low gasoline and diesel inventories, strong demand and reduced global refining capacity should support margins. Its scale, flexibility and integrated network also help MPC capture opportunities across different regions.
Marathon Petroleum beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 49.3%. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2026 earnings has gone up 41.6%. MPC carries a Zacks Rank of 2.