Macquarie turns bullish on U.S. refiners VLO, TSO, HFC, PBF, DK

• Macquarie sees plenty of long-term value in the oil refining market despite concerns over the outlook for U.S. crude oil production growth, and initiates coverage with five new Outperform ratings for Valero (VLO -1.5%), Tesoro (TSO -1%), HollyFrontier (HFC -1.4%), PBF Energy (PBF -1.8%) and Delek U.S. Holdings (DK -1.4%).
• While oil demand remains above 1M bbl/day, Macquarie notes that refining capacity continues to be tight, oil finding and development costs have fallen to $25/bbl which has lowered crude production break-even levels, and capital discipline in the space has increased which opens the doors for special dividends and share buybacks.