It's becoming painfully obvious -- especially to me -- that no one cares about MPC's Q2 earnings ... nor those of PSX. The actual numbers will be great but the market see nothing but future recession and slowing fuel sales. Things may change for refining stocks but it's difficult to predict the catalyst. #PSX
V
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Refining stocks may be taking a hit today as the EIA released two weeks of energy data (due to system issues last week). The data does show some relatively minor US gasoline demand destruction with the last 4-week demand down 2% versus last year. Similarly, US distillate fuel oil demand is down 7%. Note that exports of both products are higher then last year. While US crude inventories declined, US fuel inventories are higher. These numbers can't be much worse than what the market was expecting, so I assume that recessionary fears are once again controlling the day. Very frustrating. #MPC #PSX
MS 6/27/2022 AM Excerpts -- Refining stocks corrected substantially from recent highs — while we acknowledge risks to the outlook, current valuations imply meaningful downside to the 2023 strip. Either a major recession or substantial shift in the supply-side outlook would likely be required to realize this.
"Demand destruction" comes up in virtually all of our investor conversations — we are not blind to this risk, but it is important to be clear about magnitude. While we do expect demand will probably grow by less than it otherwise would have in a lower price environment … China reopening … the expected recovery in jet demand … summer driving season … demand is quite difficult to "destroy."
The supply-side picture is also not easy to resolve. The primary reason for the recent run-up in cracks and refining equities has been a significant supply shock from Russia's invasion into Ukraine.... Its nearly 2.8MMbpd of refined product exports accounted for ~11% of the global waterborne refined products market in 2021…far less obvious these will find a home if Europe follows through on its current plans to ban imports in early 2023
Even if all of the above factors theoretically move in a way that loosens thee refined products balance, there is still the matter of Europe's natural gas. Natural gas is an important input into the oil refining process, as it is needed for both heat generation and hydrogen creation.
Putting it all together — what is the market discounting? At the moment, refining stocks appear to be discounting the 2022 strip, but no structural shift in earnings power or sustained strength in the refining business beyond this point. However, we think the current market pricing implies a significant and relatively imminent slowdown in global economic activity and refined product demand. Whether this will happen or not remains to be seen, though we note that our economists' current views would imply this may be too harsh of a scenario. Therefore, we would be buyers of the group here, and particularly flag favorable 2:1 and 3:1 bull:bear case skew for VLO and MPC, respectively. #MPC #PSX #DINO
In a few weeks, the crack spread goes from a very high historically price to even 20-25% higher a barrel today to around a crazy crack spread of $62/barrel and in the same time refiner stocks drop 30% in price?
I don't know about you, but that is a signal for me to buy refiners.
If oil prices go down as they have been, that is good for the already constrained supply of gasoline, diesel, and jet fuel. That will just juice demand.
Guys and gals, it's time to buy.
Good luck.
#mpc, #psx, #dino
J
Yahoo raised quarterly earnings estimates again from $4.20 to $4.41. Has been steadily going up.
B
Time to buy.
j
Here is the sad part. If you didn't sell before the FED GOD said we have inflation (anyone with at least half a brain cell already had this figured out) and are still holding the stock, it is at a price point that could go either way. Do you sell and hope it falls further or hold and wait for a spectacular earnings report in a few weeks?
b
Navellier said three good quarters coming for energy companies
j
I believe Bruce is in a race to become the PSX boards one line post champion. Too bad for those of us that have to endure it since most of them could be said at one time.
Pre market decline -- now $4.27 for VLO -- should not reflect today's trading. Crude prices down with big jump in crack spreads is ideal for refiners. Of course, logic may not matter. #MPC #PSX
June 23 (Reuters) - Major U.S. oil refiners and U.S. Energy Secretary Jennifer Granholm emerged from an emergency meeting on Thursday on how to lower pump prices with no concrete solutions but a promise to continue talking, according to a source familiar with the discussions.
The two sides entered the meeting with a promise to work together in good faith, but they are still far apart on solutions. The discussion comes at a tense moment for President Joe Biden and Big Oil. The president has criticized its CEOs for reaping huge profits from a fuel supply crunch exacerbated.
Granholm, striking a more conciliatory tone, expressed interest in a refiner proposal to waive summertime gasoline specifications that combat smog but make the fuel more expensive, a source said. She also downplayed a proposal to ban, or limit, fuel exports as a viable short-term option, the source said.
GASOLINE AND DIESEL=GOOD FOR ANOTHER 100 YEARS= CHAIN SAW, CARS, AIRPLANE=
THERE IS NO REPLACEMENT FOR PETROLEUM EVER=
PETROLEUM COST IS VERY LOW=SELLING CRUDE FROM
USA RESERVE= A VERY BAD IDEA=
IT TAKES PETROLEUM TO MAKE BATTERY RUN CAR.
REASON IS THAT PETROLEUM IS VERY CHEAP.
b
In my opinion, energy stocks still have room to run and will remain profitable even if crude oil falls to $90 per barrel after September, when seasonal demand naturally ebbs.
As I laid out last week , oil companies continue to boast strong operating margins, which is why I expect them to report record earnings in the coming quarter. Currently, FactSet expects the energy sector’s earnings to grow a whopping 215.4% year-over-year. This compares to initial estimates made on March 31 for earnings growth of 137.4%. For perspective, the S&P 500’s earnings growth rate is forecast to come in at 4.3%. Wall Street typically rewards companies that post strong earnings and sales results, so I fully expect energy companies’ stock to be dropkicked and driven higher in the wake of their better-than-expected earnings reports. Louis Navellier 4:36 pm
$VLO conversation The meeting beween U.S. Energy Secretary Jennifer Granholm and oil executives will start at 11:15, scheduled to last only 45 minutes. The President is not scheduled to attend. I guess the President has no more use for these guys. That's probably good for now. He can direct his anger at the Congressional Democrats who don't want a gas tax holiday #MPC #PSX
The meeting beween U.S. Energy Secretary Jennifer Granholm and oil executives will start at 11:15, scheduled to last only 45 minutes. The President is not scheduled to attend. I guess the President has no more use for these guys. That's probably good for now. He can direct his anger at the Congressional Democrats who don't want a gas tax holiday #MPC #PSX
K
Yahoo! has been so bad lately - especially the PSX board. I like using (http://Themaxgains.tech) now instead for my daily research.
j
Y'all probably know this but from everything I've read it seems Oil and Gold are the best bets in an inflationary environment. You can't go without Oil- - profits are there and so is the divvy- can't see it going away- so the beatdown makes no sense
b
Goldman Sachs: Upside Risk In Oil Is “Tremendously High” By Charles Kennedy - Jun 27, 2022, 10:30 AM CDT Goldman Sachs remains highly bullish on crude and refined products. GS: recent pullback could be buying opportunity. The underinvestment thesis remains the core of Goldman's energy market view. Join Our Community <img class="singleArticle__articleImage" alt="Goldman Sachs" title="Goldman Sachs">  Goldman Sachs continues to be very bullish on energy and believes that the upside risk in crude oil and refined products “is tremendously high right now,” Jeffrey Currie, global head of commodities research at Goldman Sachs, told CNBC’s Squawk Box on Monday. The recent pullback in oil prices could be a buying opportunity because prices are set to go higher from here this summer, according to the Wall Street bank.
Note that exports of both products are higher then last year. While US crude inventories declined, US fuel inventories are higher.
These numbers can't be much worse than what the market was expecting, so I assume that recessionary fears are once again controlling the day. Very frustrating.
#MPC #PSX
"Demand destruction" comes up in virtually all of our investor conversations — we are not blind to this risk, but it is important to be clear about magnitude. While we do expect demand will probably grow by less than it otherwise would have in a lower price environment … China reopening … the expected recovery in jet demand … summer driving season … demand is quite difficult to "destroy."
The supply-side picture is also not easy to resolve. The primary reason for the recent run-up in cracks and refining equities has been a significant supply shock from Russia's invasion into Ukraine.... Its nearly 2.8MMbpd of refined product exports accounted for ~11% of the global waterborne refined products market in 2021…far less obvious these will find a home if Europe follows through on its current plans to ban imports in early 2023
Even if all of the above factors theoretically move in a way that loosens thee refined products balance, there is still the matter of Europe's natural gas. Natural gas is an important input into the oil refining process, as it is needed for both heat generation and hydrogen creation.
Putting it all together — what is the market discounting? At the moment, refining stocks appear to be discounting the 2022 strip, but no structural shift in earnings power or sustained strength in the refining business beyond this point. However, we think the current market pricing implies a significant and relatively imminent slowdown in global economic activity and refined product demand. Whether this will happen or not remains to be seen, though we note that our economists' current views would imply this may be too harsh of a scenario. Therefore, we would be buyers of the group here, and particularly flag favorable 2:1 and 3:1 bull:bear case skew for VLO and MPC, respectively.
#MPC #PSX #DINO
I don't know about you, but that is a signal for me to buy refiners.
If oil prices go down as they have been, that is good for the already constrained supply of gasoline, diesel, and jet fuel. That will just juice demand.
Guys and gals, it's time to buy.
Good luck.
#mpc, #psx, #dino
The two sides entered the meeting with a promise to work together in good faith, but they are still far apart on solutions. The discussion comes at a tense moment for President Joe Biden and Big Oil. The president has criticized its CEOs for reaping huge profits from a fuel supply crunch exacerbated.
Granholm, striking a more conciliatory tone, expressed interest in a refiner proposal to waive summertime gasoline specifications that combat smog but make the fuel more expensive, a source said. She also downplayed a proposal to ban, or limit, fuel exports as a viable short-term option, the source said.
#MPC #PSX
GASOLINE AND DIESEL=GOOD FOR ANOTHER 100 YEARS=
CHAIN SAW, CARS, AIRPLANE=
THERE IS NO REPLACEMENT FOR PETROLEUM EVER=
PETROLEUM COST IS VERY LOW=SELLING CRUDE FROM
USA RESERVE= A VERY BAD IDEA=
IT TAKES PETROLEUM TO MAKE BATTERY RUN CAR.
REASON IS THAT PETROLEUM IS VERY CHEAP.
As I laid out last week , oil companies continue to boast strong operating margins, which is why I expect them to report record earnings in the coming quarter. Currently, FactSet expects the energy sector’s earnings to grow a whopping 215.4% year-over-year. This compares to initial estimates made on March 31 for earnings growth of 137.4%. For perspective, the S&P 500’s earnings growth rate is forecast to come in at 4.3%. Wall Street typically rewards companies that post strong earnings and sales results, so I fully expect energy companies’ stock to be dropkicked and driven higher in the wake of their better-than-expected earnings reports.
Louis Navellier 4:36 pm
The meeting beween U.S. Energy Secretary Jennifer Granholm and oil executives will start at 11:15, scheduled to last only 45 minutes. The President is not scheduled to attend.
I guess the President has no more use for these guys. That's probably good for now. He can direct his anger at the Congressional Democrats who don't want a gas tax holiday
#MPC #PSX
I guess the President has no more use for these guys. That's probably good for now. He can direct his anger at the Congressional Democrats who don't want a gas tax holiday
#MPC #PSX
By Charles Kennedy - Jun 27, 2022, 10:30 AM CDT
Goldman Sachs remains highly bullish on crude and refined products.
GS: recent pullback could be buying opportunity.
The underinvestment thesis remains the core of Goldman's energy market view.
Join Our Community
<img class="singleArticle__articleImage" alt="Goldman Sachs" title="Goldman Sachs"> 
Goldman Sachs continues to be very bullish on energy and believes that the upside risk in crude oil and refined products “is tremendously high right now,” Jeffrey Currie, global head of commodities research at Goldman Sachs, told CNBC’s Squawk Box on Monday.
The recent pullback in oil prices could be a buying opportunity because prices are set to go higher from here this summer, according to the Wall Street bank.