Oil Above $100 Is Creating a New Opportunity Beyond the Major Producers

Rising oil prices above $100 per barrel are widening refiners' crack spreads, creating an investment opportunity in Phillips 66, Valero, and Marathon Petroleum.

All three refiners delivered sharply higher second-quarter earnings, with refining strength helping profits outpace year-ago levels.

Analyst price targets for all three stocks trail current share prices, suggesting the market is pricing in margin strength faster than Wall Street models.

Markets have followed a predictable pattern since the United States-Iran conflict commenced. When the price of oil goes up, stocks go down and vice versa. On Sept. 10, the price of crude oil crossed the psychologically important $100-per-barrel mark. That’s coming right before investors get the latest reading on consumer price inflation (CPI), which is expected to show the effect of higher gas prices. Adding fuel to the sell-off, the CME FedWatch tool puts the odds of an interest rate hike in September at approximately 70%. That has had a significant impact on technology stocks, which are easy targets for investors seeking liquidity and to take some risk off the table.

But money isn’t leaving the market; it’s just moving to take advantage of higher oil prices. That’s been true of integrated oil companies such as ExxonMobil NYSE: XOM and Chevron NYSE: CVX . However, other investors are eyeing the widening crack spread (i.e., the profit margin refiners earn per barrel). That's creating an opportunity for oil refiners.

Phillips 66 fits the widening crack spread thesis cleanly. The company's integrated refining and midstream footprint means it captures margin on both ends of the barrel. That leverage showed up in its Q2 2026 earnings report . PSX posted $9.41 in earnings per share (EPS) against a $7.50 consensus estimate, on revenue of $52.04 billion versus the $43.60 billion Wall Street expected. That's roughly four times what the company earned in the same quarter a year ago.

The analyst forecasts on MarketBeat show that analysts are racing to raise their price targets. Of the 21 firms covering PSX, 15 give it a Buy rating against six Holds. The consensus price target is near $222—about 15% below where shares have recently traded. That gap between price and target reinforces the dynamic where the market is pricing in margin strength faster than analysts are willing to model it into their targets.

The company’s management is also giving the stock a bullish boost. The board authorized a $10 billion stock repurchase program in late July, enough to retire nearly 12% of outstanding shares. Buybacks of that size are typically read as a statement that leadership sees the stock as undervalued relative to where the business is heading. That’s a direct rebuttal to the idea that this rally is sentiment-driven.

Valero Energy Corp. NYSE: VLO is the purest refining play of the three, with no integrated upstream business diluting the crack-spread exposure. That focus is showing up in the numbers: $12.54 in EPS against a $10.11 estimate , and revenue up 48.8% year-over-year to $44...