May-September peak driving season in the U.S. Can road trips move the needle for these three energy stocks?
Looking at the improvement in the first quarter performance of U.S. oil refineries compared to the same period last year, Valero Energy (VLO +2.44%), marathon oil (MPC +2.50%)and phillips 66 (PSX +2.09%)The outlook for the summer driving season may look very positive. However, the oil refining business is complex. The energy sector is also being affected by geopolitical conflicts in the Middle East. As the summer driving season begins, here’s what investors need to know about these three oil companies right now.
A strong start to the year
Valero Energy reported first quarter 2026 earnings of $4.22 per share. This is an increase from a loss of $1.90 per share in the same quarter in 2025. Excluding one-time items, a loss of $1.90 improves to a profit of $0.89 per share. However, the year-over-year improvement is still quite surprising.
Image source: Getty Images.
Marathon Petroleum reported first quarter 2026 earnings of $1.73 per share. Removing the one-time item brought it down to $1.65. However, this is well above the $0.24 loss per share the company reported for the same quarter in 2025.
Phillips 66 reported first quarter 2026 adjusted earnings of $0.49 per share. In the same quarter of 2025, the company lost $0.90 per share. But Phillips 66 provided its fourth quarter 2025 results, another data point omitted by the other two refiners. The energy company’s first-quarter adjusted earnings were $0.49, down significantly from fourth-quarter adjusted earnings of $2.47.
Looking back at Valero, it reported adjusted earnings of $3.22 for the fourth quarter of 2025, suggesting that its first quarter earnings of $4.22 were not very impressive sequentially. And since Marathon reported Q4 2025 adjusted earnings of $4.07 per share, Q1 2026 adjusted earnings of $1.65 now seem a bit disappointing.
today’s change
(2.44%) $5.87
current price
$246.96
Key data points
market capitalization
$73 billion
work range
$241.44 – $247.42
52 week range
$125.10 – $263.75
volume
2.5M
average volume
3.7 million
gross profit
5.88%
dividend yield
1.89%
Seasonal deals that may not be worth it to you
To be fair, these companies all saw earnings improve between the first and second quarters of 2025. Two of the three companies saw similar revenue improvements in the second quarter of 2024. However, all three companies experienced a decline in revenue between the first and second quarters of 2023. That said, history isn’t clear on whether refiners like Valero Energy, Marathon Petroleum and Phillips 66 will benefit from a peak driving season. If you are simply looking to trade short-term, you may want to rethink your investment plan.
today’s change
(2.09%)$3.64
current price
$177.69
Key data points
market capitalization
$71 billion
work range
$173.51 – $178.19
52 week range
$111.19 -$190.61
volume
1.9 million
average volume
3.1M
gross profit
7.04%
dividend yield
2.78%
Meanwhile, there’s another big wild card this year that makes the outcome of the driving season even more difficult to predict. It is the geopolitical conflict in the Middle East. In fact, oil prices are a major cost of the oil refining business, and higher energy prices due to conflict are generally bad news for refiners. In particular, Phillips 66 reported a mark-to-market loss of $839 million due to hedging activities in the first quarter, likely due to rapidly rising energy prices. A change in direction of the conflict could dramatically change the outcome for America’s three largest oil refiners, for better or worse.
Don’t invest for six months at a time, invest for the long term.
It’s tempting to try to make a quick buck by investing in short-term opportunities. It sounds like a good idea in theory for refiners to benefit from increased gasoline demand during the May-September driving season. But theory and practice don’t always match on Wall Street. And today, volatility is even greater due to ongoing conflict in the Middle East.
Most investors should have a long-term focus, buying stocks with the intention of owning them for decades. An investment you only plan on holding for 5-6 months is probably not worth the effort. Recent oil refining history highlights the uncertain consequences of a short-term focus, without even taking into account the additional complexities in the current operating environment.
