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U.S. crude oil futures (USO, UCO) settle near $100/bbl as supply concerns due to geopolitical...

U.S. crude oil futures (USO, UCO) settle near $100/bbl as supply concerns due to geopolitical turmoil override fears about the global economy. Brent crude moves past $103, but the spread over WTI continues to narrow. Refiners continue to get slammed: CVRR -5.2%, ALJ -3.9%, PSX -3.4%, CVI -3.3%, WNR -3%, TSO -3%, CLMT -2.5%, VLO -2.4%, MPC -2.2%, DK -2.1%, NTI -2%, HFC -1.8%.
Comments (12)
  • Not to long ago some of the Opinion Leaders in Seeking Alpha seem to believe the refineries was the hot stock. Where are they now and what happened?
    2 Jul 2013, 03:34 PM Reply Like
  • I don't understand why WTI is moving up so much......with all the supply coming out from everywhere.
    2 Jul 2013, 04:02 PM Reply Like
  • Unrest in and around Egypt apparently...
    2 Jul 2013, 04:29 PM Reply Like
  • Shouldn't Brent move more??
    2 Jul 2013, 04:42 PM Reply Like
  • Mine is not to question why...........
    2 Jul 2013, 05:00 PM Reply Like
  • Brent crude almost always moves up on fears of Mid East conflicts.
    We have 2 happening now, Syria and Egypt. Odds are that Brent will continue to move up in the near term. This will place the refineries in a better position.....Some say that demand for WTI has increased recently, thus causing the price to go up. However, remember that some refineries also process cheap Canadian oil from the tar sands.
    2 Jul 2013, 09:11 PM Reply Like
  • Your comment doesn't answer the question why the Brent-WTI spread is getting smaller - it should widen I think. Why is that not happening???
    2 Jul 2013, 10:32 PM Reply Like
  • Pipelines and rail cars are moving more WTI to refiners in the Gulf which normally pay (near) Brent prices. Previous to this movement, WTI was for the most part "land-locked" in Cushing OK which created the glut and the large spread WTI-Brent. The pipelines and rail movement have reduced the glut.
    3 Jul 2013, 01:03 AM Reply Like
  • The press gives this explanation for the narrowing spread: BP's Whiting refinery in Indiana is back at full production, adding ~$1B/year to operating cash flow to its bottom line but also raising demand for WTI crude, which likely will push the price difference between WTI and pricier Brent crude to below $5 for the first time since early 2011, analysts at Tudor Pickering Holt say.
    3 Jul 2013, 03:26 AM Reply Like
  • So why refiners that use cheap Canadian and Bakken Shield oil be getting hammered? I would think rising WTI prices helps them even more (I'm thinking NTI in particular).

     

    It's not like the Keystone pipeline is in use.
    3 Jul 2013, 11:16 AM Reply Like
  • Refiners are highly cyclical and go through ups and downs.....NTI will go up again. Right now its the Brent WTI spread AND falling gasoline prices reducing the crack spread.
    3 Jul 2013, 11:24 AM Reply Like
  • Crack spread depend on crude, gasoline and heating oil prices.
    Lead price is crude. Now it is rising due to Egypt concerns.
    Thus cost factor in crack spread has risen, before gasoline and heating prices can catch up.
    Bottom line: very short term narrowing of crack spreads. Refiners suffer and does their pps.
    Dumb short term thinking creates buying op.
    3 Jul 2013, 11:47 AM Reply Like
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