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Refiners march higher on Berkshire-Phillips deal

  • The energy sector - especially refiners - leads the stock market higher today even as crude oil trades lower, with Phillips 66 (PSX +3.2%) contributing to the strength after Berkshire Hathaway agreed to acquire its flow improver business (I, II).
  • Berkshire's acquisition would seem to point to the next logical step for Warren Buffett’s empire building in the energy sector: investing in pipelines and, at the other end, the refineries that stand to benefit most from them.
  • Today's refining stalwarts: VLO +3.7%, MPC +3.8%, HFC +2%, TSO +3.4%, WNR +3.1%, CVI +2.9%, ALJ +2.8%, NTI +2.8%.
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Comments (9)
  • Daddy-Boy
    , contributor
    Comments (15) | Send Message
    I'm long HFC, PSX, and CVRR. Solid growth and good dividends. I think that the sector should continue to show gains as long as the WTI/Brent spread is favorable to WTI.
    31 Dec 2013, 05:04 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (8721) | Send Message
    Is PSX the best investment play on "Shale USA":

    31 Dec 2013, 05:14 PM Reply Like
  • Kospi
    , contributor
    Comments (127) | Send Message
    A refiner like PSX is not the way to play shale. Several producers like Continental Resources, Cimarex or Devon would be better. Berkshire also benefits because they haul the majority of the oil by rail from the Bakken field.
    1 Jan, 08:32 AM Reply Like
  • gmmpa
    , contributor
    Comments (493) | Send Message
    Long HFC. Interesting development. Have to see how it plays out in 2014.
    Happy New Year! Live long and prosper.
    31 Dec 2013, 05:48 PM Reply Like
  • Kospi
    , contributor
    Comments (127) | Send Message
    Buffett has zero interest in owning refineries, a truly awful business.
    1 Jan, 08:27 AM Reply Like
  • Ruffdog
    , contributor
    Comments (1564) | Send Message
    I too am long HFC.
    1 Jan, 02:14 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (1173) | Send Message
    I can't help but wonder if this means Keystone will finally get approved. Mr. Buffett owns BNSF railway and has been a strong supporter of President Obama. President Obama has in turned stood in the way of the Keystone pipeline, assuring BNSF hundreds of millions in extra profits. Maybe Buffett buying a company which benefits from increased pipeline usage and approvals signals that President Obama is about to change remove his opposition?
    1 Jan, 05:35 PM Reply Like
  • Pgman701
    , contributor
    Comments (102) | Send Message
    Kospi, why do you call refineries an awful business?
    1 Jan, 08:27 PM Reply Like
  • surfgeezer
    , contributor
    Comments (7011) | Send Message
    Agree, talk about a tough moat for competitors, a cheap supply of inputs, demand here fairly stable and growing exports. Long CLMT, NTI.
    7 Jan, 03:46 AM Reply Like
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