I guess I shouldn't be disappointed - the distribution should have warned me not to expect too much. But the drop in gross margin compared to Q3 was huge - $ 24/barrel compared to $ 36/barrel in Q3. The slides in the presentation they gave last month sure don't explain that drop. Maybe the call tomorrow will explain.
Sorry again for borrowing CLMT's board, but they are both refiners. And I try to split my OT posts between CLMT, CVI and ALJ boards, since they all have refiner MLPs.
Yes, it told me that I don't know what I need to know about refiners. There are so many variables. They didn't explain this exactly, but it appears that the drop in refining margins from Q3 was due to lower prices for gasoline. I guess this makes sense - if gasoline drops 10 or 20 cents per gallon in the winter (certainly this does not happen where I live, but maybe in Minnesota, people don't drive much in the winter), that's a drop of probably $ 4 or $ 5 in the refining margin, depending on what % gasoline you produce. So let's see what I need to track - there's the WTI-Brent spread; the CWS-WTI spread, the NDL-WTI spread; what percentage heavy oil the refinery can use in a Q; what price the refiner gets for its production, which means not only the wholesale price of gasoline, but also diesel, distillates, asphalt and whatever; the price of RINs and how many the refinery needs; the weather in Minnesota, and who knows what else. And next Q I'll learn some other inputs I needed to know, but only after the knowledge would have been useful..
What I did learn is that in Q1 NTI will build up inventory so it can continue to sell product during the turnaround. Good for Q2, because sales won't be eliminated during April. Not so good for Q1 because sales will probably drop 5% or a bit more while the inventory builds. CS says they expect the 2013 distribution to be about $ 3.60 for a 12% current yield. they think CVRR's yield will be several points higher in 2013, but over the longer term, they think NTI is a better investment. Of course, CS was one of the underwriters for NTI's 2 offerings in the last year, so I'm sure they're really objective.
I thought the 2013 CVRR yield would be closer to 17%, but what do I know.
I'd be upset except my buy price for most of my NTI is under $ 20.