Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Wed May 21, 2008 10:35 am Post subject: Re: Refining margins watch (was Tesoro)
Quote:
Crude Oil 131.6
HO 3.8440
RBOB 3.3645
Gap -0.4795
Ref Margin 21.1882 $/bbl
Ref Margin 0.5045 Cents/Gal
Update: At over 3.35 per gallon for unleaded this will pretty much assure a $4.00 nationwide average unleaded price in the next week or so, using 65 cents as the average taxes/retail mark up.
Posted: Tue May 27, 2008 11:01 am Post subject: Re: Refining margins watch (was Tesoro)
Quote:
Crude Oil 129.93
HO 3.8606
RBOB 3.3672
Gap -0.4934
Ref Margin 23.3044 $/bbl
Ref Margin 0.5549 Cents/Gal
We are now over $23, which is getting to be really interesting. We are now back into the territory where people can start to make a little money.
With the exception of our dead cat WNR, which is back up over 10, and the most efficient participant in this little group, FTO, the rest of the refiners' stocks are down a little bit today.
Posted: Tue May 27, 2008 8:11 pm Post subject: Re: Refining margins watch (was Tesoro)
Today was a big profit taking session across the board, but gas and diesel lost less %price than oil. As much as this is about peak oil, it seems to be more about a lack of refined product. Fuel oil has really lead the second leg from 100 to 135$, pulling crude oil with it.
Goldman talks about how we need $200/bbl to stop demand growth, but whats the crack spread at that point? Whats the discount on heavy/sour crude? How long can plentyful lower grades keep up with increasingly rare light/sweet?
I have my bets on the refiners getting a bigger piece of the profits in $130 oil in the short term.
Posted: Wed May 28, 2008 10:11 am Post subject: Re: Refining margins watch (was Tesoro)
According to my little spreadsheet, $200 per barrel equates to about $5.35 per gallon wholesale/futures price, so about $6 retail, assuming a $25 per barrel refining margin. For the moment, this assumes that the diesel and unleaded pricing is about the same. Of course, diesel is more expensive right now.
As to the discount, it can be pretty significant. I think the CEO of FTO was saying awhile back he bought some tar sands crude for $50 last fall, when the WTI price was up about 75. There is a table of this on the EIA website, but a lot of deals are made for individual tankers/barges depending on the assay of the content of that particular shipment.
You can envision a situation where the shortage/peak situation moves down the food chain, with the higher grades getting depleted first. The refiners who are the most aggressive about retooling their equipment to take the heavy stuff will get the benefit of the lowest priced crude, but run the risk of the refinery margins going to hell and them not being able to get a return on their investment.
Posted: Thu May 29, 2008 1:41 pm Post subject: Re: Refining margins watch (was Tesoro)
Crude Oil 127.04
HO 3.6850
RBOB 3.4178
Gap -0.2672
Ref Margin 22.9044 $/bbl
Ref Margin 0.5453 Cents/Gal
Refining margins are still over 22, but note that within the last two days, the gap between heating oil and unleaded has shrunk to only 26. Seems like it was in the 40's and low 50's for awhile.
This lower demand figure that was in the inventory report today must have had some effect. HO is down 13 cents or so, RBOB only down 2.
Posted: Tue Jun 03, 2008 11:19 am Post subject: Re: Refining margins watch (was Tesoro)
Quote:
Crude Oil 126.01
HO 3.6822
RBOB 3.362
Gap -0.3202
Ref Margin 22.8596 $/bbl
Ref Margin 0.5443 Cents/Gal
Holding steady. One month until the end of the quarter. Still time to make the books look good when earnings are announced in July.
TSO, VLO both way up in the last few days, WNR, the whipping boy, has more than doubled since that analyst conference we reported on the other day. It has gone from 8, on May 19th, to over 17 today.
Of course it was at 39 when this thread was started back around Halloween, so if you bought it then, your spouse is probably still swearing at you. But, I think if you are a little more patient, the good earnings will start to hit this group, and your thick skin will eventually be rewarded. FTO, by the way, has been the star of the group because it is the most efficient, and it is down a little today. Must be people cashing in on their profits and moving into these others. USA Today mentioned it yesterday as one of the better performers in the Energy sector.
Might be time for this group, finally.
Warning: Usual caveats about not taking the investment advice of some guy on the internet.
Posted: Fri Jun 06, 2008 7:20 am Post subject: Re: Refining margins watch (was Tesoro)
Quote:
Crude Oil 130.81
HO 3.7586
RBOB 3.3876
Gap -0.3710
Ref Margin 20.3509 $/bbl
Ref Margin 0.4845 Cents/Gal
Oopsie. This little rally in crude oil has not trickled down to the products yet. We are up over 20, but not at the levels we were a couple of days ago.
Looks like the refiners were pummeled on Wednesday while we were distracted.
Posted: Fri Jun 06, 2008 7:38 am Post subject: Re: Refining margins watch (was Tesoro)
Here is a graph of the refining margins, the way we have been calculating it, for the last year.
At $20 or so, these guys should be able to hold their heads high for a change. This is about the same level as it was last year when the stock prices were all about 30% higher than they are now.
Here, via Yahoo, is the TSO stock price for the same period. The stock price is still just as bad as it was last fall, when the refining margins were bad, but now, the refining margins are good.
Posted: Tue Jun 10, 2008 11:32 am Post subject: Re: Refining margins watch (was Tesoro)
Goldman Sachs seems to think refining margins will suffer going into the summer. Oil has been so volitile its hard to tell what to think. One thing for sure, the US dollar is looking very strong today, which usually is followed by lower oil prices. There appears to be a call for $150+ oil, but is this really happening with the dollar rising and Europe looking weak?
Oil is down to 132 now heating oil is 3.88, gasoline 3.38.
Im not an expert, but $132 oil is only $3/gallon, and I get a 1-2-3 crack spread of $24!? Gas prices still rising in retail sector, what gives? Refiners will have a great 2nd quarter.
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Thu Jun 12, 2008 5:26 pm Post subject: Re: Refining margins watch (was Tesoro)
bkwillia wrote:
Im getting around $24/barrel with the 3-2-1 crack spread. Why are refiners getting down graded?
Fear that they will be included in new fossil fuel windfall tax legislation that rapes after-tax income in the quarterlies. _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
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