AP News

Refiners shares lower on Citi downgrade

NEW YORK (AP) — Shares of three big oil refining companies fell on Monday after a downgrade by a Citi analyst, who said a lot of the good news for those stocks is already reflected in their share prices.

Analyst Faisel Khan downgraded Valero Energy Corp., Marathon Petroleum Corp., and Phillips 66 to "Neutral," from "Buy."

U.S. refiners will have some long-term advantages, including access to cheap natural gas and a growing supply of domestic oil. But a lot of those advantages are already showing up in the share prices of those refiners, Khan wrote.

"Furthermore, it appears the market has become overly excited with what we believe will be a banner third quarter earnings season for refiners," Khan wrote, adding that there are risks that could put pressure on margins after the third quarter. Those include the potential that a warmer-than-normal winter will reduce sales of heating oil, and the global economy still faces headwinds, Khan wrote.

Valero shares fell $1.20, or 3.6 percent, to $32.55 in afternoon trading. Marathon was down $2.11, or 3.8 percent, to $53.50. Phillips 66 fell 47 cents to $46.26.

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