Feb. 27, 2014, 3:46 PM
- Oil refiners are getting hit today as Brent crude falls to its lowest price in more than a week on rising tensions in Ukraine, shrinking the premium to West Texas crude to the narrowest level since October.
- Given Ukraine’s location, the country's situation obviously will impact Brent more than WTI; meanwhile, WTI’s losses are limited after U.S. government data yesterday showed crude supplies at Cushing, Okla., declining to a four-month low.
- Phillips 66 (PSX -2.8%) has dropped 3.5% YTD, while Delek US (DK -5.3%) has plunged 17%, Valero (VLO -4.3%) has slipped 3.8%, Holly Frontier (HFC -3.1%) has fallen 8.2% and Marathon Petroleum (MPC -4.4%) is off 8.5% in 2014.
- Other decliners today: TSO -1.5%, ALJ -5.4%, WNR -4.2%, CVI -3.4%, CLMT -0.7%.
- ETFs: USO, OIL, UCO, SCO, DBO, DTO, BNO, CRUD, USL, DNO, UWTI, SZO, DWTI, OLO, OLEM, TWTI
Feb. 25, 2014, 7:08 AM
Feb. 25, 2014, 12:05 AM
Feb. 24, 2014, 5:30 PM
Feb. 19, 2014, 5:09 PM
- HollyFrontier Corp. (HFC) declares $0.30/share quarterly dividend, in line with previous.
- Forward yield 2.62%
- Payable March 28; for shareholders of record March 14; ex-div March 12.
- Additionally, the board declares special dividend of $0.50/share,Payable March 17; for shareholders of record March 5; ex-div March 3.
Jan. 23, 2014, 3:53 PM
- Bullish sentiment on U.S. refining has become increasingly consensus, but the reality is that refiner shares have caught up to near-term expectations, Raymond James says.
- Aside from general seasonality, the firm says it’s tough to paint a bullish picture for gasoline/diesel cracks amid the continued upward creep in global refining capacity; also, valuations are sitting near the top end of the historical range after the recent run-up in the sector.
- The firm sees little in the way of near-term catalysts to drive the next leg up in refining stocks during the historically weaker summer months.
- As a result, the firm cuts its ratings for Valero Energy (VLO -0.1%) to Outperform from Strong Buy, and Holly Frontier (HFC -1.3%), Delek US (DK -4.3%) and PBF Energy (PBF -0.8%) to Market Perform from Outperform; only “defensive, insulated” Phillips 66 (PSX -0.3%) gets an upgrade, to Outperform from Market Perform.
Jan. 6, 2014, 2:32 PM
- HollyFrontier (HFC +0.3%) is downgraded to Sell from Neutral at Citigroup based on valuation; the firm's price target remains $40.
- Citi points to Wider Group 3 and Rockies Basis as potential headwinds: “HFC serves these regions where the seasonality in product prices between winter and summer months has been more pronounced. Some of this is a result of more Gulf Coast products migrating into the Mid-continent as a result of higher utilization rates and limited export outlets for gasoline.”
Dec. 31, 2013, 3:56 PM
- 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%.
Dec. 20, 2013, 3:18 PM
- Shrinking crude spreads - WTI has gained 7.2% while Brent has risen just 1.7% so far in December - likely will hold back refiners during the first six months of 2014, Cowen's Sam Margolin says.
- Extremely favorable refining conditions from last month are deteriorating amid higher utilization and continued reduction in crude imports, limiting supply and causing U.S. prices to melt higher, the firm explains, adding that investors need to "manage near-term expectations" while "remain(ing) constructive on the refining story for 2014."
- Margolin keeps Outperform ratings for Western Refining (WNR +4%), Marathon Petroleum (MPC +2.6%), Tesoro (TSO +0.4%), Valero (VLO +1.4%) and PBF Energy (PBF +1.7%); HollyFrontier (HFC +2.4%), Delek (DK +2.3%), Northern Tier (NTI +0.6%), Alon USA (ALJ +1.7%) and Calumet Specialty Products (CLMT +3.8%).
Dec. 11, 2013, 12:52 PM
- Tesoro (TSO -1.8%) apparently didn't offer enough good news at yesterday's analyst day, as shares tumble despite the general perception from the meeting as "incrementally positive."
- The key messages in the meeting surrounded progress of the synergy capture from the Carson acquisition, continued margin improvement through feedstock and product optimization and driving additional logistics growth.
- TSO sees rail unloading capacity along the U.S. west coast for North Dakota crude oil growing to nearly 1M bbl/day through 2015; TSO's $100M rail-to-barge project in Washington is the largest of the offloading projects announced so far.
- Imperial Capital raises its TSO price target TSO to $63 from $57, and Howard Weil lifts its target to $66 from $62.
- Other refiners are lower too: VLO -1.3%, PSX -0.7%, MPC -1.8%, WNR -2.6%, HFC -1.6%, ALJ -1%, NTI -0.2%, DK -1.9%, CLMT -2.7%.
Dec. 9, 2013, 10:47 AM
- J.P. Morgan is the latest investment banker to turn bullish on refiners, upgrading HollyFrontier (HFC +2%), Valero Energy (VLO +1.8%) and Marathon Petroleum (MPC +0.9%) on its expectation for a larger difference between Brent and West Texas oil prices.
- The firm revises its view on oil prices, forecasting Brent prices averaging $105.50/bbl for 2014 and $100.30 for 2015 vs. WTI prices of $91.50/bbl for 2014 and $85.30 for 2015, suggesting a $14-$15 differential, which should increase U.S. refining margins.
- In particular, the firm believes HFC's inland refining system is "well positioned to benefit from growth in production of disadvantaged inland North American crudes, and expect(s) HFC to capture Brent-WTI price differentials as higher gross margins across the majority of its throughput."
- HFC is upgraded to Overweight from Underweight, VLO and MPC are raised to Neutral from Underweight, and Phillips 66 (PSX +1.5%) and Tesoro (TSO +1.2%) are maintained at Overweight.
Dec. 3, 2013, 7:07 PM
- BofA Merrill Lynch makes a positive case for leading refiners HollyFrontier (HFC), Valero (VLO) and Tesoro (TSO), believing the rebound in crude spreads signals the early stages of crude saturation on the U.S. Gulf coast and introduces a new layer of seasonal margin volatility that plays to the benefit of the sector.
- The firm upgrades HFC to Buy from Neutral with a $60 price target, up from $51, after HFC has lagged the early seasonal rebound in the U.S. refining sector that has accompanied the expansion in crude differentials.
- VLO is BofA's top pick in the sector; poised to complete a second MLP, VLO can unlock $5-$9/share of value in the stock, the firm says.
- The firm likes TSO's west coast crude advantage and accelerated spending at its MLP.
Nov. 15, 2013, 3:09 PM
- The EPA is proposing a range of 15B-15.52B gallons of renewable fuel in 2014, nearly 3B fewer gallons of biofuel to be blended into gasoline than mandated by the original 2007 law.
- The new proposal angers farm groups, corn ethanol producers and supporters of biodiesel, but it's a victory for oil companies, which have long argued that if the content of ethanol in motor fuel exceeded 10% - i.e., the "blend wall" - it might damage cars, motorcycles and lawn mowers.
- The administration also is setting a 2B-2.5B gallon target range for all advanced biofuels (earlier).
- Among the biggest movers: PEIX +13%, ADM -2.9%.
- Refiners: VLO +0.8%, HFC -0.4%, PSX -0.5%, TSO -0.3%.
- ETF: CORN -1.2%.
Nov. 15, 2013, 11:24 AM
- Barron's is bullish on refiners HollyFrontier (HFC -0.2%) and Tesoro (TSO -0.3%), each of which has operations near the heart of the shale oil boom that should benefit from shifting oil price dynamics.
- HFC will continue to see cost benefits from its proximity to plentiful shale oil, which can be even cheaper than WTI, and is investing to improve the efficiency of its refineries which should give it an edge over competitors as delivery bottlenecks from booming oilfields are resolved with new pipelines.
- Like HFC, TSO has refineries with geographic advantages, which Credit Suisse says are among the best-positioned in U.S. refining; also, TSO's valuation may not reflect the benefits that will result as it moves pipeline, storage and other assets into its Tesoro Logistics (TLLP) MLP.
Nov. 14, 2013, 2:36 PM
- Refiners such as Marathon Petroleum (MPC +4.9%) and Valero (VLO +4%) are surging today, and Barron's Ben Levisohn says it’s all about the oil spread.
- While Brent crude has stayed steady for the last three months, trading at ~$109/bbl, WTI has dropped 12% to ~$94; the more expensive Brent is relative to WTI, the better it is for U.S. refiners.
- VLO, for example, has gained 17% during the past three months, and much of its price has followed the Brent-WTI spread.
- Also: PSX +2.1%, TSO +2.7%, HFC +3.2%, WNR +4.3%, ALJ +5.2%, ALDW +1.3%, CLMT +2.6%, CVI +1.3%.
Nov. 13, 2013, 5:35 PM
- HollyFrontier Corp. (HFC) declares $0.30/share quarterly dividend, in line with previous
- Forward yield 2.67%
- Payable Dec. 27; for shareholders of record Dec . 6; ex-div Dec. 4 .
- Additionally, the board declares special dividend of $0.50/share, payable Dec. 16; for shareholders of record Nov . 29; ex-div Nov .27 .
HFC vs. ETF Alternatives
HollyFrontier Corp is an independent petroleum refiner. It produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. It operates in two segments; Refining and HEP.
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