[bkwillia]

Goldman Sachs seems to think refining margins will suffer going into the summer. Oil has been so volitile its hard to tell what to think. One thing for sure, the US dollar is looking very strong today, which usually is followed by lower oil prices. There appears to be a call for $150+ oil, but is this really happening with the dollar rising and Europe looking weak?

Oil is down to 132 now heating oil is 3.88, gasoline 3.38.

Im not an expert, but $132 oil is only $3/gallon, and I get a 1-2-3 crack spread of $24!? Gas prices still rising in retail sector, what gives? Refiners will have a great 2nd quarter.

[bkwillia]

Nymex Heating Oil Future 394.00
Nymex RBOB Gasoline Future 352.30
WTI Cushing Spot 136.74

Im getting around $24/barrel with the 3-2-1 crack spread. Why are refiners getting down graded?

[FreddyH]

$this->bbcode_second_pass_quote('bkwillia', 'I')m getting around $24/barrel with the 3-2-1 crack spread. Why are refiners getting down graded?

[DantesPeak]

$this->bbcode_second_pass_quote('', '6')/9/08 Octane Wk.
Octane Week
Hart Energy Publishing, LP

June 9, 2008

U.S. Gulf Coast Crack Spread Jumps 33%

The U.S. Gulf Coast 3-2-1 crack spread rose 33% from May 23 to May 30, to $25.99/bbl.

For the month of May, the average Gulf CoastGulf CoastGulf CoastGulf Coast crack spread was $18.08/bbl.

Compared to the end of April, the crack spread has risen 59%.

[pup55]

$this->bbcode_second_pass_code('', 'Crude Oil 135.44
HO 3.8700
RBOB 3.4591
Gap -0.4109
Ref Margin 19.6791 $/bbl
Ref Margin 0.4686 Cents/Gal
')

We haven't checked in with this for awhile. Looks like we have slipped back under 20.

MRO and WNR up a little bit, the rest of our little group getting beaten down today.

[DantesPeak]

$this->bbcode_second_pass_quote('', 'O')ctane Week
Hart Energy Publishing, LP
June 16, 2008

U.S. Gulf Crack Spread Falls 23%

The U.S. Gulf Coast 3-2-1 crack spread dipped 23% between May 30 and June 6, from $20.94/bbl to $16.06/bbl. The dip ended a four-week increase.

The average crack spread for the last four weeks is $18.80/bbl.

The average crack spread for the last eight weeks is $16.84/bbl.

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 137.1
HO 3.8345
RBOB 3.4591
Gap -0.3754
Ref Margin 17.1693 $/bbl
Ref Margin 0.4088 Cents/Gal

[GoghGoner]

$this->bbcode_second_pass_quote('pup55', '')$this->bbcode_second_pass_quote('', 'C')rude Oil 137.1
HO 3.8345
RBOB 3.4591
Gap -0.3754
Ref Margin 17.1693 $/bbl
Ref Margin 0.4088 Cents/Gal

[qwanta]

Jim Cramer was asked about Valero on lightning round today:

"There was a 20 year period when the refiners didn’t make any money. Cramer thinks we could be “back in that game.” He would not buy Valero or any refiner."

http://www.cnbc.com/id/25496316

[GoghGoner]

Cera building a refinery costs index. The cost to build a refinery is up 76% since 2000. Not quite what I was looking for but maybe you folks find it fascinating.

[DantesPeak]

NYMEX Crack Spread And Refining Margins



Counting the modest rises in gasoline and heating oil futures, the nearby NYMEX crack spread was whittled down a penny to $13.42 per barrel, yielding a gross refining margin of 9.5%. A month ago, the margin was 14.4%.

Seeking Alpha

[idomar]

one of the flapping mouths on CNBC commented that, with crack spreads so low, some refineries will shut down production soon as there is no money to be made converting oil to petrol.

Dante, any comment as to what level the crack will need to reach before this happens?

[DantesPeak]

$this->bbcode_second_pass_quote('idomar', 'o')ne of the flapping mouths on CNBC commented that, with crack spreads so low, some refineries will shut down production soon as there is no money to be made converting oil to petrol.

Dante, any comment as to what level the crack will need to reach before this happens?

[idomar]

$this->bbcode_second_pass_quote('DantesPeak', '')$this->bbcode_second_pass_quote('idomar', 'o')ne of the flapping mouths on CNBC commented that, with crack spreads so low, some refineries will shut down production soon as there is no money to be made converting oil to petrol.

Dante, any comment as to what level the crack will need to reach before this happens?

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 139.17
HO 3.9111
RBOB 3.4316
Gap -0.4795
Ref Margin 16.4364 $/bbl
Ref Margin 0.3913 Cents/Gal

[pup55]

$this->bbcode_second_pass_quote('', 'P')emex, Mexico's state-owned oil company, has reduced the amount of crude oil it supplies to Texas refineries operated by Royal Dutch Shell and Valero Energy Corp. as falling production curbs exports.

The guaranteed amount of Maya oil for a Deer Park refinery, jointly operated with Shell, was cut by 15 percent, the Mexico City-based company said in a regulatory filing. Pemex also lowered oil supplies by 5.8 percent to the Port Arthur refinery of Valero, the largest U.S. refiner.

Separately, Pemex said output at Cantarell, the world's third-largest oil field, fell to an almost 12-year low in May.

[pup55]

Gotta check this today.

$this->bbcode_second_pass_quote('', 'C')rude Oil 138.2
HO 3.9200
RBOB 3.37
Gap -0.5500
Ref Margin 16.5070 $/bbl
Ref Margin 0.3930 Cents/Gal

[qwanta]

Here's another segment from the financialsense Q&A ( 6/28 )

http://www.financialsense.com/fsn/BP/20 ... tml#qcalls
===================
Hello, guys. Thanks so much for your show. Jim, I had a quick question for you. I was wondering what the fundamentals are of the refiners like Valero and Sunoco, those kind of guys, that they have been getting pretty beat up. Thanks a lot for any help you can give for that.

JIM: Right now, the crack spread – the difference between the spread on gasoline prices and the raw cost of oil – has narrowed, so the profit margins for the refiners has been narrowing. You know, what has happened is the price of oil has moved up much faster than the ability of the price of gasoline to keep up. But if you take a look at these and you're willing to hold onto these companies over a longer period of time, Valero especially –since it has the ability to refine heavy crude –you're talking about a company that has that capacity and we are far short of capacity here in the United States. So if you're willing to look beyond this short term event here because eventually, gasoline prices are going to have to go sky high. Otherwise refineries won't be able to make money. [9:20]
===================

[pup55]

$this->bbcode_second_pass_quote('', 'C')rude Oil 124.86
HO 3.5700
RBOB 3.0393
Gap -0.5307
Ref Margin 15.4956 $/bbl
Ref Margin 0.3689 Cents/Gal

[pup55]

$this->bbcode_second_pass_quote('', ' ')NEW YORK, July 29 (Reuters) - Valero Corp (VLO.N: Quote, Profile, Research), the largest U.S. oil refiner, reported a 67 percent decline in quarterly earnings on Tuesday as soaring crude oil prices translated into weak profits from gasoline production.

Net income in the second quarter fell to $734 million, or $1.37 a share, from $2.25 billion, or $3.89 a share, a year earlier.

Companies that refine oil to produce gasoline and other products have struggled to pass through record crude prices to their customers.