It makes NO sense that the refiners popped today given that it's getting less and less profitable for them to refine crude oil as crude oil gets more expensive - especially the non-integrated refiners such as Valero, Tesoro, Frontier and Holly.
Because there's not enough of them. Crude is available but refining capacity limits it's production and usability.
Well, if that's the case, why look at the fundamentals? Why not just trade price? It's the only thing you can truly trust.
Capacity Utilization is literally at a 3 year low at 81.4% These guys have closed up shop until the refining spreads widen. Should most likely be a harbinger of a quick drop in crude soon.
Valero is selling off refineries (Aruba) and literally shutting others (Corpus Christi), running at 73% utilization as a whole, because buying crude on the open market is crushing their margins, and their price is being bid up 5% today.
They don't have to sell at a loss. In the US anyway. I'm expecting cuts in production to continue until either petrol prices rise or crude falls. I would expect that to happen before the summer is out. I like FTO at these prices, but it can go lower of course.
UGHHHH!!!!!!!! Why are they pushing these higher when crude just busted through $119/bl?????? They are ruining my desired trade, and are committing suicide.
there is nothing unusual about this refiners stock returns after periods of low margins Feb. 15, 1999 April 5, 1999 16% Jan. 17, 2000 April 3, 2000 30% Dec. 11, 2000 May 28, 2001 46% Dec. 15, 2003 May 31, 2004 48% Feb. 28, 2005 April 25, 2005 7% Feb. 13, 2006 April 24, 2006 27% Feb. 5, 2007 May 14, 2007 32% guess you guys havent heard of mean reversion