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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: quehubo who wrote (42464)4/22/2005 7:44:46 AM
From: XoFruitCake  Read Replies (3) of 206269
 
Most of the board are probably not too interested in refinery. However, I just finish listening to VLO 1Q conference call. The global end product demand (diesel, jet fuel and gasoline) is as good as you can expected if you believed what this guy said. They also don't see any demand hurt by high price of gasoline and diesel. There is an interesting exchange with an analyst about where the gasoline is going to come from at around 40:00 to 42:00 into the conference call. The diesel discussion is part of the opening statement by Greehey. I think this couple with the 1Q China 9.5% growth should settle the direction of near term (next 3-4 months) oil demand and trade off on the direction. But we can certainly argue about what next year demand since it is fun and probably won't hit our pocket book one way or the other (until next year). I posted this in VLO board:

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For those who has skin in this puppy (whether long and short), you should listen to the confernce call. It has a wealth of information. But the most important information that I gather:

1) the sweet/sour discount is going to be better in 05 than 04 by about average $4/bbl

2) diesel price is higher than 04. First time distillate price in gulf is higher than gasoline. VLO actually export some diesel outside of US becuase margin is even better. So diesel is going to provide a good part of the incremental earning this year

3) when asked about the gasoline supply for this summer. VLO stated that last year US import 1.2mbbl gasoline for summer driving. For 05, it take at least this much. However when pressed about where those gasoline is going to come from. The discussion quickly turn to low Europe gasoline inventory and high Middle East/Africa/Asia gasoline demand. And the answer seems to come out is that the price of gasoline must be higher here in US to induce arb. activities to bring gasoline here. This is different than Greehey say last week (last gas price in summer). My guess is that VLO really believe the gasoline price will be much higher this summer becuase of global demand vs global refinery capacity and we can expect to see very high gasoline price this summer
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