Citi Anticipates MRO 1Q, Estimates Overall R&M Earnings Of $684 Million

For 1Q'11, Citi estimates that Marathon Oil Corporation's MRO overall R&M earnings will be $684 million compared to $213 million in 4Q'10. “We estimate an overall wholesale margin of $0.20 per gallon compared to $0.09 per gallon in 4Q'10,” Citi writes. “The large increase in the margin is two-fold. First, MPC has over 600 kbod of refining capacity (total 1.16 mmbls/d) in the Midwest all tied into pipelines that can move advantaged crude to those refineries. Second, MRO benefits from wide sweetsour differentials at its Garyville facility. “The sweet-sour spread was over $12 per barrel in 1Q'11 compared to just over $9 per barrel in 4Q'10. Every $1 per barrel increase in this differential adds $150 mm in annual after-tax profits.” Marathon Oil Corporation closed Thursday at $53.84.