Sam Marlin

Sam Marklin inquired about the unusual jet to diesel dynamic observed in the quarter, asking if it was due to commodity volatility or more structural macro effects. He then broadened the discussion to macro demand, noting that despite weak consumer sentiment and PMIs, refining margins remain high, questioning what this implies for the 'real' mid-cycle margin environment.

Answer

CCO Rick Hessling described the jet-diesel differential volatility as unprecedented, attributing it to a combination of inventory and supply imbalances that have since corrected, confirming it's not structural. On macro demand, Rick Hessling stated that MPC's internal demand signals are strong, with global demand continuing to grow. He noted modest growth in diesel and jet, flat-to-slightly lower gasoline demand, and strong signals for over-the-road and container business. He concluded that market tightness and disruptions indicate a higher mid-cycle margin environment.

Sam Marklin inquired about the unusual jet to diesel differential volatility in Q3, asking if it was due to market volatility or structural changes. He also sought Marathon Petroleum's perspective on current macro demand indicators, which appear weak, yet refining margins remain high, suggesting a potential shift in the mid-cycle margin environment.

Answer

CCO Rick Hessling described the jet to diesel differential volatility as unprecedented, attributing it to inventory and supply imbalances rather than structural issues, noting it has since corrected. He emphasized MPC's strong internal demand indicators, citing modest growth in diesel and jet, flat gasoline, and strong signals from over-the-road and container businesses. He concluded that market tightness and global disruptions support a bullish near-term outlook.

Sam Marlin asked about Chevron's Permian production results, specifically inquiring about the drivers behind the strong performance, capital efficiency gains across co-op and NOJV acreage, and whether these improvements reflect better field results or broader industry trends.

Answer

Chairman and CEO Mike Wirth highlighted a strong quarter with production 60,000 barrels/day over the 1 million barrel plateau, attributing it to efficiency gains. He noted no change to plans to moderate growth and focus on cash generation, emphasizing progress in technology and fewer rigs/completion spreads. Wirth confirmed strong performance across co-op, NOJV, and royalty acreage, expecting good momentum into 2026.

Sam Marlin asked about the drivers behind Chevron's strong Permian production results, specifically inquiring about capital efficiency, performance differences between co-op and NOJV acreage, and whether the improvements reflect better field results or broader industry efficiency gains.

Answer

Chairman and CEO Mike Wirth highlighted strong Permian production, exceeding 1 million barrels a day, driven by efficiency gains. He stated that Chevron's plans to moderate growth and focus on cash generation remain unchanged, with continued strong performance achieved with fewer rigs and completion spreads, and advancements in technology. He expects some quarterly fluctuations but anticipates good momentum into 2026 across all acreage types.