Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (43272)	7/26/2011 9:52:05 PM
From: Difco	1 Recommendation Respond to of 78625

Paul Senior, We discussed refineries few weeks ago and just read an interesting article ('Shares in small refiners surge with crude spread') in the Financial Times (7/26/11) - the article explains why the shares of refiners such as CVR Energy, Delek, HollyFrontier and Western Refining have surged between 75 and 130 per cent year-to-date due to a profit from an anomaly in global crude oil prices. ft.com "For years WTI traded at a premium to Europe’s Brent and other light US crudes. But a glut at its delivery point in Cushing, Oklahoma, after regional production surged has imposed a large markdown. This month WTI’s discount widened to a record $23 a barrel. No pipelines run from landlocked Cushing to the refinery corridor along the Gulf of Mexico, or to refineries in the east and west coast, so regional refineries able to tap the hub to make fuel have seen profit margins widen sharply. Western, which has two small refineries that supply less than 0.9 per cent of US fuel needs, said in a filing the imbalance was “a positive development for us as all of our oil purchases are based on pricing tied to WTI”. CVR, with a lone small refinery 100 miles from Cushing, enjoyed margins of more than $20 a barrel in the first quarter, from $6 a barrel a year before. The reporting season for the refiners, to start this week, is likely to show even better economics in the second quarter of the year."