And have a lot inside at the strength of diesel, in both inventory trend, and demand.
Those hydrocrackers are putting out just the right product at the right time.
look for margins to explode.
the diesel inventory is about as low as the system can go, so pricing should continue upward from here.
problems in the rear view mirror.
last quarter was turnaround expenses. That plant is back at it, and heavy Canadian feedstock pricing is getting very attractive, as pipeline space into Superior is now on high % allowocation.
rinsanity is returning to being just nutsy regulatory stuff not industry killing reg.
crack spread dips were likely mostly mitigated with hedges.
plenty of distribution funds to keep the high dividend secure. Shorts should give up soon.
I see this returning to a 7-8% yielder with stable EPS margins in 6 months. worth waiting for.
my t-bonds cant drop 2% in yield.
I like the action today, up big on better than average volume. With all the days to cover, we could string several days in row of high % price gains. Just need the market , and the DC mess to clear the way.
wcs is often different than Bakken as far as discounts. with WCS, you do have the same transportation takeaway variability to transport to market. Although with WCS you also have added discounts associated with the process limitations that come with excess extra heavy crude that can at times overwhelm the online heavy crude process locations. Look for periods of very deep WCS discounting which helps margins at northern tier US refineries, such as Montana, and Superior. And if they can look in crude discounts at times of oversupply of Canadian heavies, then the profitability can be assured at least at the level needed to meet the distribution.
This is all just noise. its a big ship and it doesn't veer too far off course very often. They are spending huge investment money on LNG and getting next to no revenue from it this year. By the end of next year, it should be a totally different story. Mr. Market should be saavy enough to show the expected added margin about 6 months ahead of expected production. Big moves between now and then will come due to delays, or schedule improvement, or announcement of more cost overruns. See example of Imperial on the near disaster over timing of Kearl startup.
you cant judge a refining company based on the quarter when they shut the plant down, hire hundreds of temporary contractors, and spend lots of money on replacement parts. They all do this every few years, and Im sure Superior plant had lots of deffered maintenance coming out of a sale. So, off we go, judge the DCF coveraged based on a couple of normal quarters.
look at the roller coaster pattern on this thing. it always seems to come back and make a new high. Down $10 from the peak now, huge opportunity. buying calls with both hands. Also, look at the last couple of months divergence between COP and CVX. They have the same drivers. Im guessing with world oil prices firm, to higher, that its CVX that is going to catch up to COP not the other way around.
these guys could cut the distribution, or worse, issue another load of stock, so its risky to jump in here and double down. But I know im not wrong on this, so taking the coward choice and buying Nov 30 calls hand over fist.
this confirms the Canadian supply strategy, where diluted heavy crude, and Bakken will compete for transportation alternatives going south. Refineries located north of Cushing will get the price discount. Should help Calumet once they are up and out of turnaround season. Looks good going forward to lock in some very good crude processing margins that more than cover the distribution.
You really cant export excess crude. its against US law. The excess gets to the GC , where it backs out some type of Crude Import. There is still plenty of crude coming into PAD II from oversees, and all it takes is $5-6/bbl discount to run the Perm Basin/ Eagle Ford crude instead. What can be exported is the finished products. So the refineries on the GC are going to run full, as long as the products can be shipped to destination at lower than local fuel costs. Western has a local advantage in selling clean product in their geographic refining area. nobody else there, and anyone wanting to compete would just as soon export product rather than run a truck distribution network all over Indian Country.
very rational story on the company financial presentation. especially like the hedging that locks in margins on fuel production that ASSURE the distribution. The only thing I like better than 10% yield, is 10% yield with a cash flow certainty. All they need to do is run the plants, and we win.
more than likely. just announced a 2 B$ added share repurchase. That's 10% of the existing market cap. For you nebiews, that means an automatic increase of 10% on earnings. this provides the answer of what they intend to do with all the cash this thing is throwing off.
Look for a divvy increase as well at the next opportunity to announce a payment, they will likely keep about the same balance between dividend and share repurchases.
What I cant figure out, is what they are planning to do with all the cash this is throwing off.??
They finished the capex on Detroit, they've paid for Texas City with 2 quarters of profit, they have total debt of about 3 quarters cash flow, they are buying a few shares, and pay a modest divvy, but what are they going to do going forward??