Refiners slide sharply lower after U.S. widens oil export potential

|By:, SA News Editor

Refiners take a beating in early trading, as a lift of the ban on U.S. oil exports is expected to narrow the WTI-Brent spread, which could cause refiners' profits drop if they are forced to pay higher prices to compete with international buyers for U.S. crude.

“We don’t think the current system needs to be changed,” Valero Energy tells Bloomberg.

Yesterday's rulings gave Pioneer Natural Resources (PXD +2.6%) and Enterprise Products Partners (EPD +1.4%) permission to ship ultralight oil to foreign buyers - a narrow ruling, but one that is likely to spark similar requests from other companies, and increase lobbying for a full lifting of the 40-year-old ban on exporting crude oil.

Refining stocks are broadly lower: VLO -7.4%, PBF -5.8%, MPC -5.7%, WNR -5.5%, DK -5.4%, HFC -4.6%, ALDW -4.6%, TSO -3.8%, NTI -3.5%, PSX -2.9%, ALJ -2.7%, CVI -2.3%.