• 4 minute Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 8 minutes Could oil demand collapse rapidly? Yup, sure could.
  • 15 minutes Oil and Trade War
  • 48 mins Could oil demand collapse rapidly? Yup, sure could.
  • 6 hours Oil prices going down
  • 1 hour Are EVs Safer Than Combustion Engine Vehicles?
  • 4 hours Migrants: Italy Wants EU Border Agency In Africa, Not At Sea
  • 33 mins What If Canada Had Wind and Not Oilsands?
  • 11 hours Sabotage at Tesla
  • 19 hours Oil and Trade War
  • 15 hours The Wonderful U.S. Oil Trade Deficit with Canada
  • 18 hours Germany Orders Daimler to Recall 774,000 Diesel Cars in Europe
  • 7 hours After Three Decade Macedonia End Dispute With Greece, new name: the Republic of Northern Macedonia
  • 4 hours Sell out now or hold on?
  • 6 hours Trump Hits China With Tariffs On $50 Billion Of Goods
  • 5 hours Nopec Sherman act legislation
  • 7 hours The Irrelevance Of BTU Rating - Big Oil's Gimmick To Hoodwink The Public
  • 18 hours venezuala oil crisis
  • 18 hours When will oil demand start declining due to EVs?
Editorial Dept

Editorial Dept

More Info

Trending Discussions

A Deeply Undervalued Play in the Refining Sector

Two weeks ago before my vacation, my inbox filled with questions surrounding the refining space and CVRR in particular, an MLP that I recommended at its IPO price of $25.  In my columns in OilPrice.com, I've spoken recently about the refiners and the difficulty I thought they would continue to see in the coming months.  I even made the case that the mid-Continental refiners, of which CVRR's 'parent' company CVR Energy (CVI) is one, would in fact be in for the worst case of all the refiners, save for the refiners relying upon crude-by-rail.

So how can I still be favorable towards CVRR with the negative outlook I have towards the refiners and CVR Energy in particular?

The question goes a long way to understanding how fundamentals get translated into trading ideas and how there are often values to be had - even in sectors that are up against it fundamentally. 

Yes, it is true that the disintegrating WTI/Brent spread is putting tremendous pressure on the margins of refiners, particularly mid-con refiners -- it was this that forced the new and horrible guidance from Valero (VLO) in their recent quarterly report to shareholders on EPS -- and we imagine that other refiners are sure to follow with negative reports and outlooks.  CVRR is hardly immune to this; As the Brent/WTI spread goes to parity and beyond, as I think it will, their margins and revenue will also decline, putting their very generous distribution is some jeopardy.

So, am…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





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