by pup55 » Tue 29 Jan 2008, 16:54:59
$this->bbcode_second_pass_quote('', 'N')EW YORK (AP) -- Shares of Valero Energy Corp. jumped Tuesday morning after the refiner posted fourth-quarter profit that widely beat Wall Street's estimates despite falling by about 50 percent on high crude-oil prices.
The stock rose $4.96, or 9 percent, to $59.86 after the opening bell.
AP via Yahoo$this->bbcode_second_pass_quote('', 'F')rontier Oil Corp. led the refining sector higher on Tuesday after a Goldman Sachs analyst upgraded its shares, saying improved margins will help the stock over the short term.
Frontier shares rose $4.69, or 14.6 percent, to $36.79 in morning trading.
Goldman analyst Arjun Murti lifted his rating on Frontier to "Buy" from "Neutral" and added the company to the Americas Conviction Buy List and the Americas Buy List. Seasonal recovery in refining margins combined with Frontier's exposure to Canadian light-heavy crude-oil spreads support Murti's bullish view.
AP via Yahoo
TSO back over 41 as we write.
by pup55 » Wed 30 Jan 2008, 11:56:33
$this->bbcode_second_pass_quote('', 'C')rude Oil 92.27
HO 2.5596
RBOB 2.3418
Ref Margin 11.2997 $/bbl
Ref Margin 0.2690 Cents/Gal
We are up over 11 for the first time in a long time.
$this->bbcode_second_pass_quote('', 'T')he oil refiners saw a monster run in Tuesday's trading, all while crude closed at its highest level in two weeks. Is it time to think about taking profits?
Karen Finerman thinks so. With the oil markets so volatile, and the crack spread moving quicker than ever, she unloaded 75% of her position in the refiners over the last few days.
$this->bbcode_second_pass_quote('', 'G')uy Adami would buy Tesoro
Tesoro Corp
TSO
41.537 0.487 +1.19%
[TSO 41.537 0.487 (+1.19%) ] on Valero’s
strong earnings. TSO might still have room to run higher, he said. And the valuations are too attractive to ignore.
CNBC
by pup55 » Thu 31 Jan 2008, 17:22:00
$this->bbcode_second_pass_quote('', 'S')hares of Tesoro Corp. fell Thursday after the company reported a fourth-quarter loss due to lower refining margins driven by higher costs.
The refiner's stock dropped $1.79, or 4.4 percent, to $38.61 in afternoon trading.
Tesoro's earnings were hurt by unscheduled maintenance and repairs at its Hawaii refinery and its inability to offset higher crude oil prices onto consumers.
Citigroup analyst Doug Leggate took another view, saying Tesoro's prospects "look brighter" and that West Coast margins will start strengthening.
"We expect margins to strengthen further as the quarter progresses, and provide the catalyst for Tesoro to recover from here," Leggate wrote in a note Thursday. He reiterated a "Buy" rating on the stock, saying share-price weakness is a buying opportunity.
Yahoo$this->bbcode_second_pass_quote('', '
') HOUSTON, Jan 31 (Reuters) - Independent western U.S. refiner Tesoro Corp (TSO.N: Quote, Profile, Research) said on Thursday total throughput from its seven U.S. refineries was expected to range between 540,000 and 600,000 barrels per day (bpd) in the first quarter of 2008.
The seven refineries have a combined throughput of 660,000 bpd. Tesoro said on Jan. 14, total throughput would range between 545,000 bpd and 595,000 bpd in the first quarter.
Reuters via YahooThe second article is kind of interesting. It confirms that the crew at Tesoro just cannot get excited about running the reactor. The numbers they are talking about are roughly 80% of capacity.
$this->bbcode_second_pass_quote('', 'J')an 29 (Reuters) - Leading independent U.S. refiner Valero Energy Corp (VLO.N: Quote, Profile, Research) said Tuesday combined throughput from its U.S. refineries in 2008's first quarter would fall about 400,000 barrels per day (bpd) below 3.1 million bpd capacity.
Reuters via Yahoo
We got this announcement the other day from Valero, which suggest about 85% utilization.
So these guys are clearly going to try to increase their own refinery margins, by taking an occasional Friday off, and shooting golf or something instead of trying to make unleaded and not making any money at it. I am sure they hope the crude oil price will come down a little as a bonus.
This part of the strategy may backfire on them, if the market keeps doing what it is doing, and we will be paying even more for unleaded this spring.
by pup55 » Fri 01 Feb 2008, 19:53:09
$this->bbcode_second_pass_quote('', 'H')e closed out his Valero position
$this->bbcode_second_pass_quote('', 'V')alero is disposing of those refineries that need to be upgraded to handle heavy sour crude," Gheit said. "Valero will be a company with strictly heavy, sour crude refineries. If you want to hit a bull's eye, this is where you should go. It's where the money is made and where the future is. Anything else is a diluted version of the pure play.
"
From earlier in this thread.
Valero is a bit of a different company. It has some retail, some natural gas, and the refinery operation. They are going to spend a lot of money to retrofit their plants to take heavy crude, which in the long term will help them. Interestingly, we did the original analysis on refinery margin, and these guys were a little better than Tesoro.
The 10Q's for these companies have not all come out yet for the recent quarter but here is the tally so far for refinery margins:
TSO 8.28
VLO 9.20
FTO ?
WNR ?
HOC ?
I think the last three will come out in the next week or so.
We did this graph awhile back for the refinery margins in the 4th quarter, based on the little spreasheet I use for the updates. It looks like the calculation is pretty well calibrated for TSO and VLO. Maybe about $9 per barrel is right.
HOC and WNR will be a couple of bucks higher, and FTO higher still because they can use nastier crude.
by pup55 » Thu 07 Feb 2008, 17:41:31
$this->bbcode_second_pass_quote('', 'r')oughly 63, give or take, when the market wakes up to what is happening.
Hey, you're right.
I always get a little worried when I start agreeing with the pesky analysts.
$this->bbcode_second_pass_quote('', 'C')rude Oil 87.95
HO 2.4551
RBOB 2.2646
Ref Margin 11.7238 $/bbl
Ref Margin 0.2791 Cents/Gal
As the crude price slides, the unleaded price slides less, refinery margins back up near 12.
Remember what I said about the unleaded price being about the same as the diesel price.
Edit:
After reading this 34-page report, full of all sorts of statistics, regression analysis and other stuff that only a frequent follower of either this or the weekly petroleum status thread would fully appreciate, the following paragraph jumps out and beats one over the head:
$this->bbcode_second_pass_quote('', 'F')inally, the extent of the Alkylate supply necessary to meet summer grade
gasoline simply cannot reasonably be stored ahead of time, in our view.
Some 30% of RFG gasoline is pure Alkylate, while RFG accounts for around
35% of the US market. Over the four months of the summer, this would
require 120 million boe of Alkylate. Assume, 50% is imported – that would
imply 60 million boe put into storage. Given that average gasoline inventories
through the year stand at 215 and typically fluctuate by 20 million boe, it is
simply incredulous to believe that blending component storage could make a
dent in the incremental supply necessary to meet summer gasoline.
$this->bbcode_second_pass_quote('', 'C')alifornia transitions to summer starting on 2/15 (LA, 40% of California
refining capacity) and 3/15 in San Francisco. By that time, storage needs to
be available for summer grade gasoline. Substantial de-stocking will be
necessary between mid-Jan and mid Feb at the latest. Over the past week
this has resulted in aggressive rack pricing by refiners to lower inventories –
essentially fuel dumping. Cash traders suggest crack spreads have already
started to recover as gasoline 'dumping' has come to an end.
by pup55 » Wed 13 Feb 2008, 22:06:46
$this->bbcode_second_pass_quote('', 'C')rude Oil 93.3
HO 2.618
RBOB 2.3913
Margin 11.228802 $/bbl
Margin 0.267352429 Cents/gal
This last little rally in crude oil cut down on the margins. We are still in a really slow demand time of year.
The stocks rallied today with the rest of the market.
$this->bbcode_second_pass_quote('', 'E')W YORK, Feb 12 (Reuters) - Valero Energy Corp (VLO.N: Quote, Profile, Research) said Tuesday that maintenance work on an unspecified unit at its Houston, Texas, oil refinery will last until Thursday.
"Continuing today through Thursday, Feb. 14, Valero will be performing maintenance on one of the refinery units,"
Reuters
XOM up over a buck. Evidently the traders are not afraid of Chavez.
by pup55 » Fri 15 Feb 2008, 15:50:14
Yahoo Biz
$this->bbcode_second_pass_quote('', 'R')efining stocks tumbled Friday after a Lehman Brothers analyst lowered his rating on the sector, suggesting the industry has entered a "dark age" of shrinking margins that could last through the end of the decade.
$this->bbcode_second_pass_quote('', 'L')ehman Brothers analyst Paul Cheng cut his rating on the sector to "Negative" from "Neutral,
$this->bbcode_second_pass_quote('', '"')We forecast the sector will resume its downward spiral by early summer and will exit the year below its recent lows,"
I love it. A genuine disagreement.
We will find out pretty soon who is right.
Update:
Here is the rationale:
$this->bbcode_second_pass_quote('', 'T')he brokerage said the second half of 2007 marked the inflection point, where the U.S. refining market transitioned from its previously powerful multiyear up-cycle to a new downtrend that could last through the rest of this decade. "Although we think the stocks have already reached a near-term bottom and could potentially rise 10 percent to 20 percent in the next two to three months, we remain cautious on the sector," analyst Paul Cheng wrote in a research note to clients.
