Michael Fitzsimmons
Oil & gas, dividend investing, research analyst

Alon USA Partners: Under Pressure As Crack Margins Contract

Alon USA Partners (NYSE:ALDW) is a variable-rate MLP that owns and operates a crude oil refinery in Big Spring, Texas. Alon Partners refines oil from the prolific Permian Basin into finished petroleum products like gasoline, jet fuel, and diesel. These fuels are then marketed across Texas, Oklahoma, New Mexico, and Arizona through the LP's integrated wholesale distribution network. Units are down 30% from their peak and currently yield 20.6%. Lower crack spreads are expected to cut into margins going forward. Meantime, a potential traditional midstream drop-down would help support normalized cash flow and distributions for the LP, and is a step in the right direction. The partnership needs to diversify EBITDA generation that is now solely dependent on

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