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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (27014)	11/11/2003 8:05:24 AM
From: John Carragher	Respond to of 206086

I said you cannot make money in refining in a market that prices are falling... if prices are going up or stable you will make money... remember.. barrel at 30. if it drops to 27. then this is a $3. loss to refineries and marketing.. as they have purchased crude at a higher price and cannot sell it at that price , Why,, nyharbor prices change almost immediately daily and finished product can be bought on the open market cheaper than buying it from the refineries if they hold prices... This has been going on for decades. Marketing also had a great quarter ,, why prices went up and stayed up.. best news in the world for refining and marketing.. they can plan the spread or margin and achieve it.. But if the crude drops all that inventory in the system just got wacked. so if you feel prices will remain stable or go higher refining/marketing is a good bet... If you feel crude will drop in price.. then you could look at chemical side of business they get much more competitive with cheaper crude prices.. E& P makes its profits more or less depending on crude , and refineries get pissed off because they or they did have to buy from the e&P division of their international company at the fixed price... Today under profit units the refinery may be able to buy crude on the outside to improve their margins but i bet it not a large %. hope this helps... ps If you expect crude prices to drop in next six months , international intergrated oils are not the place to be. Refining and marketing margins will shrink quickly. best... john