[pup55]

$this->bbcode_second_pass_quote('', 'o')lly Corporation (NYSE: HOC)
("Holly" or the "Company") today reported second quarter net income of $11.5
million ($0.23 per basic and diluted share) compared to $158.6 million ($2.89
per basic and $2.84 per diluted share) for the same period of 2007.

[pup55]

It's been awhile since we checked this:

Crude Oil 115.83
HO 3.1223
RBOB 2.9286
Gap -0.1937
Ref Margin 11.8084 $/bbl
Ref Margin 0.2812 Cents/Gal


Ugly. Another couple of cents and we will be below breakeven for some of these refiners.

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 121.32
HO 3.3020
RBOB 3.0425
Gap -0.2595
Ref Margin 12.6774 $/bbl
Ref Margin 0.3018 Cents/Gal

[skeptik]

$this->bbcode_second_pass_quote('pup55', '
')This is why I always say: "don't believe what you see on the internet".

[pup55]

I just hate being wrong, especially when there is money involved, but I am a good sport about it anyway.

Conceptually, these guys ought to be prime candidates for a buyout--particularly WNR which is down 80% year on year. If you are a German, or Japanese guy or Saudi and want to make a dollar-denominated investment in a scarce resource at super-bargain-basement pricing, you do not have too far to look.

The shortages DP and others are worried about in the upper midwest are a direct artifact of the same "lack of demand" that caused these guys to not make any money. Also, the situation that is about to happen with heating oil up in the NEUS has its roots in the fact that for the first time since about 1990, we did not run our refineries above 87% capacity all summer long.

So this situation is likely to be self-correcting. We will of course be observing this situation just to see what happens.

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 100.55
HO 2.9200
RBOB 2.7605
Gap -0.1595
Ref Margin 19.2094 $/bbl
Ref Margin 0.4574 Cents/Gal

[pup55]

$this->bbcode_second_pass_code('', 'Crude Oil 97.4
HO 2.7874
RBOB 2.604
Gap -0.1834
Ref Margin 16.3586 $/bbl
Ref Margin 0.3895 Cents/Gal
')

Now we know.... the aftermath of all of this is no help for the refiners. Probably going to cost them a lot of money for repairs, and they will just not be excited about running any gas.

TSO off 8% today
Valero off 8%
FTO off 12%
WNR our whipping boy only off 5%
MRO also off 5%

[bkwillia]

The commodities market is broken. The wholesale price does not reflect supply or demand. We are in the middle of panic selling, and there is very little attention being paid to the situation in Texas, the national inventories, or the availability of imports. Since there is no price signal to boost production or cut back consumption, even if all those refineries come back online, we still would have the problem of inventories at critical levels. Seriously, how is this any different that the Katrina/Rita shortage?

[AirlinePilot]

$this->bbcode_second_pass_quote('bkwillia', ' ') Seriously, how is this any different that the Katrina/Rita shortage?

[pup55]

$this->bbcode_second_pass_code('', 'Crude Oil 64.64
HO 1.9600
RBOB 1.48
Gap -0.4800
Ref Margin 9.0112 $/bbl
Ref Margin 0.2146 Cents/Gal
')

We haven't checked this in ages. At these pricing levels, Tesoro and Valero are marginally profitable, and in fact may not be in the black if this keeps up for a full quarter.

At these prices, the decision to run the reactor will be that the refiners with the highest marginal cost will be the first ones out of the market. They will shut down completely rather than produce at zero contribution margin.

I will have to go back and check my old charts, but at margins of the 9-cents regime, we are bringing back the late 90's for refining margins, which is a catastrophe for any capacity expansions or other projects, so as they say, the seeds of the next boom are being sown right now.

At a wholesale price of $1.48, retail unleaded should be in the neighborhood of $2.10 at the moment.

[Chief]

I did my "research" the lazy way: I went to VLO's website under the "market fundamentals" section at this url:

http://www.valero.com/InvestorRelations ... entals.htm

VLO is saying the spread on Diesel is historically high at around $18/bbl, and that's against WTI prices. So it looks to me that diesel is carrying their water, so to speak...gasoline spread is -4/bbl so it wouldn't surprise me to see VLO and others quit making gasoline in the amounts they have been.

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 42.32
HO 1.4800
RBOB 0.94
Gap 0.5400
Ref Margin 10.0876 $/bbl
Ref Margin 0.2402 Cents/Gal

[TheDude]

Sunoco Raises Chance Of Oil Refinery Closure

$this->bbcode_second_pass_quote('', 'D')ecember 15, 2008: 06:08 PM ET

By Jessica Resnick-Ault

Of DOW JONES NEWSWIRES

PHILADELPHIA -(Dow Jones)- Sunoco Inc. (SUN) said Monday it may shut down a refinery, a sign of how abruptly the fortunes of U.S. oil refiners have dimmed.

Sunoco Chief Executive Lynn Elsenhans said the company's Tulsa, Okla., refinery - which has been on the block for more than a year - would be converted to a terminal if a buyer isn't found by the end of 2009. The move, which would mark the first closure of a refinery of this size in the U.S. in at least a decade, comes as Elsenhans seeks to reinvent the Philadelphia-based refiner as it grapples with a downswing that has hit the sector broadly against a backdrop of falling gasoline demand.

While some refiners may be in a "cut-and-cope" mode, trying to reduce costs, but function normally, "we are trying to make meaningful cuts," said Elsenhans, who was appointed to lead Sunoco in August. She previously worked at Royal Dutch Shell PLC (RDSA).

Sunoco shares on Monday closed 3.3% lower at $34.75.

That Sunoco even raised the possibility of a refinery closure underscores how quickly the business environment has deteriorated amid weak global demand for refined products. Refinery valuations skyrocketed in the middle of the decade as demand ran up against capacity constraints, lifting profits.

[TheDude]

Refiner, retailer Flying J files for bankruptcy

$this->bbcode_second_pass_quote('', 'M')on Dec 22, 11:47 am ET

NEW YORK (AFP) – Flying J, a big privately held firm that operates oil refineries and truck stops, said Monday it filed for bankruptcy protection, hit by the abrupt fall in energy prices and a credit crunch.

The Utah-based firm, which has some 16 billion dollars in 2007 revenues, said it filed for reorganization under Chapter 11 of the bankruptcy code "to address near-term liquidity needs brought about by the precipitous decline in oil prices coupled with the disruption in the credit markets."

"All of Flying J's operations, including approximately 250 travel plazas and fuel stops, are open and serving customers in the normal course," the company said.

"The company plans to continue normal business operations as it moves through the reorganization process."

[Chief]

Of note, TSO has around 115MBl/day of refining capacity in Utah and North Dakota....how will the bankruptcy of Flying J affect their operations? Who is most likely to swoop in and buy Fling J's refineries?
On a *slightly* related note: How is it that SUN's stock price has held up so well since late spring (when I bought some) compared with the other refiners?
Anyone with insight, I'd appreciate it.

[pup55]

$this->bbcode_second_pass_quote('', ' ')Who is most likely to swoop in and buy Fling J's refineries?

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 41.35
HO 1.5019
RBOB 1.1084
Gap 0.3935
Ref Margin 14.6232 $/bbl
Ref Margin 0.3482 Cents/Gal

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 40.7
HO 1.1578
RBOB 1.2855
Gap -0.1277
Ref Margin 10.2339 $/bbl
Ref Margin 0.2437 Cents/Gal

[misterno]

I know it has been a year from the last post but I was just wondering the reason behind the huge drop in refinery margins lately? I remember seeing a graph in a newspaper that if the refinery margins were same as last year, we would be paying over $3/gal for gas now.

Can anyone elaborate on this?

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 83.43
HO 2.1500
RBOB 2.29
Gap -0.1400
Ref Margin 9.3984 $/bbl
Ref Margin 0.2238 Cents/Gal