Oil prices weakening, so are refiners


Refiner stocks are dropping, in line with the margin squeeze that could result from the drop in crude oil prices, Barron's Dimitra DeFotis writes.

Rising violence in Libya continues to affect energy assets, but attempts for peace between Israel and the Palestinians over the weekend may be taking some of the risk out of energy markets; Brent prices are down nearly 1% to $107.76/bbl, narrowing the spread with West Texas crude, off 0.3% to $101.74.

ALJ -3.3%, TSO -1.6%, WNR -0.9%, HFC -0.8%, VLO -0.6%, PSX -0.4%, MPC -0.2%.

Comments (7)
  • BlueOkie
    , contributor
    Comments (10479) | Send Message
     
    If oil prices are going down, doesn't that help refiners? Why is Israel/Palestinians helping oil prices? Do they produce that much and couldn't OPEC increase the quota's to make up for any loss.
    28 Jul 2014, 12:51 PM Reply Like
  • Austin Newsom
    , contributor
    Comments (122) | Send Message
     
    US Refiners have been getting pounded in the markets lately based on the various "breaking news" stories. This is missing the forest for the trees.

     

    The long term trend of increased domestic oil and natural gas production means that their feedstock costs are going to continue to fall. With the ban on unrefined petroleum exports besides condensate, their inputs are restricted to the (lower) US pricing while their outputs can be shipped whereever they can get the best price.
    28 Jul 2014, 01:40 PM Reply Like
  • brent_vossler
    , contributor
    Comments (276) | Send Message
     
    Okay - PSX is up. Strange
    28 Jul 2014, 01:40 PM Reply Like
  • zjs102
    , contributor
    Comment (1) | Send Message
     
    This statement makes no sense...

     

    "Refiner stocks are dropping, in line with the margin squeeze that could result from the drop in crude oil prices, Barron's Dimitra DeFotis writes."

     

    Falling crude prices would add support to the margin picture, not hurt it.
    28 Jul 2014, 01:46 PM Reply Like
  • Robin Hewitt
    , contributor
    Comments (5537) | Send Message
     
    "Falling crude prices would add support to the margin picture"

     

    I think the author is referring to U.S. refiners only and to a falling spread between Brent and WTI (not a general drop in crude prices). I presume refiners benefit from crack spread in general and U.S. refiners have also been benefiting from the spread between domestic and foreign crude.
    28 Jul 2014, 11:13 PM Reply Like
  • Ruffdog
    , contributor
    Comments (3533) | Send Message
     
    The day of reckoning for the HFC shorts is 8/6, when HFC will report earning.
    28 Jul 2014, 03:34 PM Reply Like
  • starcorral
    , contributor
    Comments (1711) | Send Message
     
    Ultimately winter will come and Russia (USSR- whatever) will be the wild card. The first truly bitter winter weather in Europe and the US will be the cat's meow for energy investors. Here I've been worrying aboiut the ruslkies extortiung the west. That's not going to work while energy sales can't help but be the biggest part of what gets their economy through next winter.
    28 Jul 2014, 07:48 PM Reply Like
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