Oil refiner Marathon Petroleum (NYSE:MPC) is firing on all cylinders right now. Its underlying financial performance is improving this year. To that end, revenue and diluted earnings per share rose 4% and 61%, respectively, last quarter. This was due to improved refining volumes and margins, and the company's stock price has followed suit with a 33% rally during the past year.

However, it's worth noting that no stock is without its fair share of risks. Marathon is no exception. Even though business conditions have improved dramatically this year, it operates in a business prone to volatility. In fact, Marathon saw business conditions contract significantly two years ago, and the same dynamic could play out again if its fundamentals deteriorate.

Here are three distinct concerns that stand out for Marathon Petroleum investors which could cause its stock price to fall.

Refining margins could contract
This is the big concern for any refiner. The lifeblood of an oil refiner is the margin spread that the company is able to realize. In the second quarter, this worked in the company's favor. But when spreads contract, profitability falls dramatically. For instance, in the third quarter of 2013, earnings from the refining and marketing segment totaled just $227 million. That would represent an 81% decline from the $1.2 billion in refining and marketing profits generated last quarter.

Of course, nothing from management indicates that operating conditions are worsening. But pricing can change quickly, and it's worth noting that oil refiners are vulnerable to volatility. The fact that earnings collapsed so much last year shows how drastically their profitability can swing from period to period.

Poor retail performance
Along with its core refining and marketing businesses, Marathon Petroleum holds a retail operation through the Speedway brand. Unfortunately, retail is a difficult business to be in right now. That's why fellow refiner Valero Energy (NYSE:VLO) decided to spin off its retailing unit, CST Brands (NYSE:CST). This proved to be a wise course of action for Valero, since CST reported a 20% decline in diluted earnings per share last quarter.

Marathon's Speedway segment posted a 23% drop in operating profit last quarter. Some of this was due to higher expenses associated with Marathon's expansion initiative.

Marathon decided to acquire Hess Retail Holdings LLC, which will result in Speedway growing to more than 2,700 stores across 23 states. This could prove to be a poor decision if retail profitability continues to decline.

A big contributor to the drop in profit last quarter was lower gasoline and distillate gross margin. Margin per gallon of gasoline and distillate decreased by 26% last quarter. Assuming this headwind persists, and costs keep escalating as a result of growing store count, earnings for the Speedway segment will likely be under pressure going forward.

Fully valued
Considering Marathon Petroleum's dramatic rally during the past year, it's reasonable to question its current valuation. At recent prices, Marathon trades for 18 times trailing earnings and 2.5 times book value, which is significantly above its valuation multiple during the past few years.

Marathon's valuation is not much of a discount to the broader market, making it an uneasy value proposition, especially if any of the previously mentioned headwinds come to pass. Plus, while Marathon offers a nice dividend of 2.2%, that isn't much of a margin of safety in case the stock price declines.

The Foolish takeaway
Marathon Petroleum is on a great run right now. Earnings are soaring, thanks to widening margins in its core refining operations. But it's worth noting that optimal business conditions don't last forever in refining. Pricing spreads can be volatile, and considering Marathon's poor performance in its retail business, there won't be anywhere for it to hide if spreads contract.

Complicating matters is that, after such a huge rally during the past year, Marathon looks fully valued at its current level. That means that new investors aren't getting much downside protection. It needs to be said that no stock is a risk-free proposition, and that's true even for a company like Marathon, which has been hitting it out of the park so far this year.