NEW YORK (TheStreet) -- In a recent interview Gary Heminger, the chief executive of oil refiner Marathon Petroleum (MPC) , told Jim Cramer that the company may benefit further from the recent fall in oil prices as it could drive consumer demand higher, and the stock has already rallied as a result.
Nonetheless, the recent fall in the spread between Brent and WTI could shrink Marathon Petroleum's profitability in the coming months.
Must Read: 10 Stocks George Soros Is Buying
U.S. refiners benefit from a larger spread as they purchase lower priced WTI crude and sell the refined products at prices determined by the Brent, the higher-priced European benchmark.
The chart below shows the changes in the spreads between Brent and WTI, Brent and Louisiana Light Sweet and Brent and Mars.
Source of data: EIA, Valero's Web site and OPEC
The fourth-quarter data are based on the changes in the spread during October and part of November.
All the spreads have contracted during the fourth quarter. If this trend continues, it could adversely affect Marathon Petroleum's margins in its refinery business, which still accounted for about 90% of its earnings in the third quarter.
The better-than-anticipated third-quarter earnings results also pulled up the company's stock. Its recent quarterly results showed diluted earnings per share of $2.36, 5 cents higher than analysts' consensus estimate.
Marathon Petroleum benefited from higher spreads between Brent and WTI, as indicated below.
Source of data: Google finance and EIA
Moreover, Marathon Petroleum's refining and marketing margins rose to $14.55 per barrel of oil, a 57% spike, year over year.