• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 13 mins Chicago Threatens To Condemn - Possibly Demolish - Churches Defying Lockdown
  • 4 hours COVID 19 May Be Less Deadly Than Flu Study Finds
  • 2 hours The CDC confirms remarkably low coronavirus death rate. Where is the media?
  • 1 hour Let’s Try This....
  • 56 mins New Aussie "big batteries"
  • 17 hours Monetary and Fiscal Policies in Times of Large Debt:
  • 3 hours China to Impose Dictatorship on Hong Kong
  • 5 hours 60 mph electric mopeds
  • 10 hours Iran's first oil tanker has arrived near Venezuela
  • 13 hours Nothing can shake AMLO’s fossil-fuel fixation
  • 19 hours US-China tech competition accelerates: on Friday 05/15 new sanctions on Huawei, on Monday 05/18 Samsung chief visits China
  • 1 day Fed Says It Will Begin Buying Corporate-Debt ETFs on Tuesday
Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

More Info

Two Energy Ideas: Refiners and the Back of the Crude Curve

Two energy ideas to touch upon today, now that the debt ceiling debacle is (at least for now) over:  Refiners and the back of the crude curve.

Refiners have caught a bid recently and, out of the blue, some of them have rallied more than 10% in less than two weeks.  The downturn in these stocks was fairly easy to see coming, even if it was overdone – but the subsequent rally in the shares was far less easy to see.

I’ve thought that through the 3rd quarter we’d see a compression of the WTI/Brent spread, a proxy for cracks and refining margins.  From that compression, we’d see a less than stellar report from the refiners come October and some stock weakness.

For a brief moment during the 3rd quarter in fact, we even saw WTI prices go over Brent, proof that – once again – oil traders are constantly befuddled by this benchmark ratio and how to play it (and I include myself in this characterization).

Difficulty in Libyan supplies, squeezing Brent, combined with a few mid-con refining outages here in the US, caused a further surplus of crude in Cushing.  Together, they’ve pushed the spread back out between the two benchmarks to close to $10 in very short order – catching a load of traders both short the spread and short the refiners.  

But is this quick trend buyable?  Should we reload on refining stocks today?

You’d intuitively think not – both physical…




Oilprice - The No. 1 Source for Oil & Energy News