Why are refiners up when oil is @ all time high?

B

ByLoSellHi

It makes NO sense that the refiners popped today given that it's getting less and less profitable for them to refine crude oil as crude oil gets more expensive - especially the non-integrated refiners such as Valero, Tesoro, Frontier and Holly.
 
Well, if that's the case, why look at the fundamentals? Why not just trade price? It's the only thing you can truly trust.
 
Capacity Utilization is literally at a 3 year low at 81.4%
These guys have closed up shop until the refining spreads widen.
Should most likely be a harbinger of a quick drop in crude soon.
 
Valero is selling off refineries (Aruba) and literally shutting others (Corpus Christi), running at 73% utilization as a whole, because buying crude on the open market is crushing their margins, and their price is being bid up 5% today.
 
They don't have to sell at a loss. In the US anyway. I'm expecting cuts in production to continue until either petrol prices rise or crude falls. I would expect that to happen before the summer is out.

I like FTO at these prices, but it can go lower of course.
 
UGHHHH!!!!!!!!

Why are they pushing these higher when crude just busted through $119/bl??????

They are ruining my desired trade, and are committing suicide.
 
Quote from ByLoSellHi:

It makes NO sense that the refiners popped today given that it's getting less and less profitable for them to refine crude oil as crude oil gets more expensive - especially the non-integrated refiners such as Valero, Tesoro, Frontier and Holly.
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I agree this is somewhat of a mystery. The nonlinearities are high.

nitro
 
there is nothing unusual about this

refiners stock returns after periods of low margins
Feb. 15, 1999
April 5, 1999
16%

Jan. 17, 2000
April 3, 2000
30%

Dec. 11, 2000
May 28, 2001
46%

Dec. 15, 2003
May 31, 2004
48%

Feb. 28, 2005
April 25, 2005
7%

Feb. 13, 2006
April 24, 2006
27%

Feb. 5, 2007
May 14, 2007
32%

guess you guys havent heard of mean reversion
 
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