In an article dated January 15th, I disccussed my efforts to project Tesoro's earnings using industry differentials and a guess at the company's capture rate to develop Gross Refining Margin. This weekend, using data through 3/27, I updated my spreadsheet and arrived at an estimate of of .99, well above consensus, which is .46 or .50, depending on where I check.
Tesoro's ability to beat the crack spread relies in large part on the discount on heavy/sour crudes compared to WTI. A recent article seekingalpha.com/article/127384-u-s-refiners-squeezed-by-collapse-in-crude-oil-discounts here on S-A says that complex refiners such as TSO may not be getting the deep discounts on heavy/sour crudes that have made them profitable in the past. On the other hand, there was much complaining earlier in the year about gas prices in California, where TSO does much of their business.
In any event, I thought I would pass my guesstimate along to any readers who may be interested. I am long TSO, one of my larger positions, and look forward to earnings later this month.