Oil collapse fears could drive refiners higher, Howard Weil says

|By:, SA News Editor

A potential collapse this year in domestic crude prices could push refiners higher, including Phillips 66 (PSX -0.3%) and PBF Energy (PBF +0.7%), Howard Weil says.

"From a global perspective, macro [refining & marketing] dynamics are improving into ’14 with significant crude supply growth placing a theoretical ceiling on oil prices/feedstock costs while underlying demand growth remains intact, thereby supporting product prices," the firm writes.

However, the firm endorses a slight tactical shift toward more defensive posturing with a focus on lower beta names and companies that screen at a discount from a valuation perspective, thus it cuts Delek US (DK -3.4%) and Tesoro (TSO -2%) to Sector Perform and raises PSX and PBF to Sector Outperform.

Noble Energy (NBL -0.2%), Whiting Petroleum (WLL -0.2%) and Concho Resources (CXO -1.3%) are upgraded to Focus Stock.