Laredo leads energy higher, but refining margins and natural gas not far behind

Jun. 01, 2022 4:16 PM ETPARR, DK, CVI, EQT, SWN, CDEV, KOS, WTI, USO, UNG, NG1:COM, LPIBy: SA News Team3 Comments

Rise in gasoline prices concept with double exposure of digital screen with financial chart graphs and oil pumps on a field.

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  • Laredo Petroleum (LPI) rallied ~20% Wednesday, after the company announced a $200m share repurchase Tuesday.
  • Along with Q4 results, the company planned to allocated 100% of free cash flow to debt reduction in 2022; however, given the rise in oil prices (USO) and rally in gas prices (UNG), the company is now looking to buy back 14% of shares outstanding.
  • Natural gas (NG1:COM) posted a banner day, up over 7.5%, after the EIA reported March gas exports hit a record 20.6bcf/d (> 20% of production).
  • Refining margins were not far behind, after jumping ~12% Tuesday, diesel margins in Europe jumped ~12% again Wednesday; New York harbor gasoline and diesel cracks both traded above $50 per barrel Wednesday.
  • Even with oil nearly flat on the day, levered oil names like W&T (WTI), Kosmos (KOS) and Centennial (CDEV) outperformed, up 7-9%; gas names like Southwestern (SWN) and EQT (EQT) rallied 4-6% and refiners CVR (CVI), Delek (DK) and Par (PARR) rose by ~5%.

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