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

To: Taikun who wrote (40477)	3/21/2005 6:23:48 AM
From: energyplay	Read Replies (1) \| Respond to of 206110

I'm not a refinery expert - I think we have some on the thread. I will note that Valero has refineries in California, where gasoline can get really high prices beacuse of growth, and because California requires "special" gasoline - the equivalent of a double mocha decaf latte whip... Last gasoline crisis California was importing its special blend from as far away as Finland ! I think this is a big plus for upside profits and downside protection. Refineries and Chemicals can be great areas to invest in, but we have to understand the spread between inputs (various types of crude, natural gas, etc.) and outputs -gasoline, diesel, polyethene, etc. Lots of moving parts. Throw in a bit of a leveraged capital sturcture and it gets a bit more complicated - but the upside can be enormous. A number of electric utility stocks, like TGN, CNP, RRI, SRP have done well after they were able to raise rates to customers and get slightly lower natural gas costs, then start paying down debt. Refiners and some chemical should be able to do as well. Lot more work than finding an undervalued E&P 18 months ago....

To: Taikun who wrote (40477)	3/21/2005 9:50:31 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 206110

Taikun, I would look at Premcor ( PCO ) and Valero ( VLO ) Message 21008403 VLO's got the complex refining system to handle the plentiful heavy sour crude. PCO is working on an attractive deal with EnCana to upgrade one of their remaining light sweet refineies to handle heavy Canadian Oil Sands output. Several months ago I sold my Sunoco and bought Premcor in part because all of Sunoco's refineries handle light sweet only and I see the Peak Oil phemonena happening in light sweet first. The retail price of gas and diesel is about the same no matter what a R & M uses for feed stock and its been the light sweet that has been zooming up and has a higher political risk. I've sold all my pipeline MLP's. A rising interest rate enviroment is not good for MLP's and they've lost a lot of their tax advantage now that the tax rate on ordinary dividends has been lowered.