• 4 minutes China goes against US natural gas
  • 12 minutes WTI @ 67.50, charts show $62.50 next
  • 15 minutes Saudi Fund Wants to Take Tesla Private?
  • 1 hour Downloadable 3D Printed Gun Designs, Yay or Nay?
  • 18 mins Peak Oil is Now!
  • 12 hours Rattling With Weapons: Iran Must Develop Military To Guard Against Other Powers
  • 41 mins Russians hacking vs U.S., Microsoft President: Russians Targeting All Political Sides
  • 56 mins Corporations Are Buying More Renewables Than Ever
  • 7 hours VW Receives Massive Order Of 1,600 All-Electric Trucks
  • 15 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 19 hours CO2 Emissions Hit 67-Year Low In USA, As Rest-Of-World Rises
  • 22 hours The EU Loses The Principles On Which It Was Built
  • 12 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 22 hours Film on Venezuela's staggering collapse
  • 21 hours Saudi PIF In Talks To Invest In Tesla Rival Lucid
  • 18 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
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