Marathon Petroleum Plunges 2.8% Amid Sector Turbulence: What's Fueling the Selloff?

Summary
• Marathon Petroleum (MPC) trades at $164.14, down 2.83% from its previous close of $168.92
• Intraday range spans $170.3 (high) to $163.74 (low), reflecting sharp volatility
• Sector peers like Valero Energy (VLO) show muted declines at -0.88%

Marathon Petroleum’s sharp intraday selloff has ignited market speculation about sector-wide pressures. With refining margins under scrutiny and global crude inventory dynamics shifting, investors are dissecting technical indicators and options activity to gauge the next move. The stock’s 2.83% drop has pushed it closer to its 200-day moving average, while options data reveals aggressive bearish positioning ahead of the August 15 expiration.

Bearish Technicals and Sector Headwinds Weigh on MPC
The selloff aligns with bearish technical signals and sector-specific challenges. Marathon’s RSI of 44.01 and MACD histogram of -1.32 confirm oversold conditions and bearish momentum. Sector news highlights China’s 82-million-barrel crude inventory build, which could depress refining margins, while EU sanctions on Indian refineries signal potential supply chain disruptions. Additionally, the stock’s 52-week low of $115.1 and 200-day MA at $152.37 suggest long-term support levels are under pressure.

Oil & Gas Refiners Mixed as Valero Holds Steady
While Marathon Petroleum’s 2.83% drop outpaces the sector, Valero Energy (VLO) remains relatively stable at -0.88%. This divergence suggests sector-specific factors, such as MPC’s exposure to U.S. refining margins, are driving the move. China’s energy reforms and EU sanctions on refineries create a mixed outlook, with Valero’s diversified operations potentially insulating it from immediate margin compression.

Bearish Options Playbook: Aggressive Puts and Gamma-Driven Bets
• 200-day MA: $152.37 (below current price)
• RSI: 44.01 (oversold)
• MACD: -0.193 (bearish)
• Bollinger Bands: Lower band at $165.57 (critical support)

Key levels to monitor include the 200-day MA and lower Bollinger Band at $165.57. A break below $163.74 (intraday low) could trigger further selling. Aggressive bearish positioning is evident in the options chain, with high-leverage puts offering asymmetric potential.

Top Option 1: MPC20250815P160
• Strike: $160 | Expiration: 2025-08-15 | IV: 28.74% | Leverage: 109.98% | Delta: -0.295 | Theta: -0.0288 | Gamma: 0.0443 | Turnover: 1,565
• IV: Moderate volatility | Leverage: High reward potential | Delta: Sensitive to price moves | Gamma: Strong sensitivity to price changes
• This put offers 109.98% leverage with a 28.74% IV, ideal for a 5% downside scenario (projected price: $155.93). Payoff: $4.93 per contract.

Top Option 2: MPC20250815P157.5
• Strike: $157.5 | Expiration: 2025-08-15 | IV: 31.39% | Leverage: 156.06% | Delta: -0.212 | Theta: -0.0475 | Gamma: 0.034 | Turnover: 760
• IV: Balanced volatility | Leverage: Aggressive upside | Delta: Moderate sensitivity | Gamma: Responsive to price swings
• This put’s 156.06% leverage and 31.39% IV make it a high-conviction play. Payoff under a 5% drop: $7.57 per contract.

If $163.74 breaks, MPC20250815P160 offers short-side potential. Aggressive bulls may consider MPC20250815C170 into a bounce above $170.3.

Backtest Marathon Petroleum Stock Performance
The backtest of MPC's performance after an intraday plunge of -3% shows favorable results. The 3-Day win rate is 59.46%, the 10-Day win rate is 59.82%, and the 30-Day win rate is 63.57%. Additionally, the maximum return during the backtest period was 10.51%, which occurred on day 59, indicating that MPC has a higher probability of positive returns in the short to medium term following a significant downturn.

Bullish Long-Term Outlook, But Short-Term Volatility Looms
Marathon Petroleum’s 2.83% drop reflects near-term bearish momentum, but its 52-week high of $183.1 and long-term bullish Kline pattern suggest resilience. Investors should watch the 200-day MA at $152.37 and sector leader Valero Energy (VLO) at -0.88% for directional clues. A break below $165.57 (lower Bollinger Band) could accelerate the selloff, while a rebound above $170.3 may reignite bullish sentiment. Position aggressive puts like MPC20250815P160 for downside protection and monitor sector news for margin impacts.