for a $40 stock, anything more than $1/share would get ya a 10 PE. PE in these stocks typically runs around 15. SO, don't sneer at $150MM
maybe a cross between strong and strange?
more important. just did the Q2 2015 strip for USGC crack spread. Its about 30$/bbl. add in sour crude discounts, and light crude discounts, and we are talking some real good margins. Plus demand is up 5% from last year.
US production doesn't have to fall to fix the price problem. it just has to decline to less than the growth in world oil demand . so less than say 0.5 MM B/D per year. We are almost there, and depletion will take us there in months not weeks.
yeah, its a nice wave here. Noted that year to date fuel sales in US are up 6/7/8% YOY for mogas/jet/diesel. Local West Coast margins are on fire, figuratively, with both Avon and Torrance out of business. Bought more this week. also look for divvy increase at next opportunity.
so, what nit wit is selling today?? the distribution coverage is fine now, trending better, and there is a 10% yield carrot. I think low 30s is the right place for this to land next month.
learn not to trust the one day price action on heavy volume days. These stocks will eventually follow fundamentals, and high volume means some stupid computer thinks it spotted something, that is likely transitory.
refiners have medium term cycles that match nicely with the USGC crack spread, along with the discount of WTI to Brent. This thing with wild swings owning to Crude absolute levels makes little sense, and probably will not be a lasting correlating influence. margins for specialty products made from petroleum have a long history of being more sticky than the price of oil, so tend to expand during crude declines. examples are asphalt, solvents, lube oils. This plays in CLMT favor, as they were shooting themselves in the foot expanding into really small fuels only plants during period of declining WTI/Brent spread, and with declining crack margins. this may bale them out for a quarter or two. hope enough to get profits back above the distribution.
current margin for even unadvantaged crude vs. Brent is $12/bbl as of this morning. Then and the advantage on top of a good ( great where i live) crack margin, and we have the golden age again.
the us rig count means little as this is world wide supply demand balance issue. unlike Nat Gas where the market is geographically limited to NAmerica. Supply from other producing areas will drop as well. eventually.
upstream oil is bigger for FLR. they reported good earnings today and moderately positive guidance . FLR is trading at 12-14 times 2015 expected earnings. CBI is trading at less than 9. We have a long way to run, and this short covering before the report is a good start.
the pull back from the fast run up sounds right. But anybody with volume on the West Coast should be getting special attention. Mogas sales in Ca are 1 MM Bbl/day. Prices are $40/bbl above US avg. Thats $40MM./ day of added margin. PSX should get at least 10% of that.
VLO spread sheet shows crack margins rising to top of cycle levels. West Coast Gas crack( Brent) above $30, with impressive heavy crude discounts as well. WTI discount widening as well, so a triple bonus. Expect lots of Q1 earnings estimate increases going into the end of what should be price madness as we end March.
lots of good info here, but still failing to highlight the key point. Not only is CBI not levered to oil price, nor to oil drilling, nor land based exploration; rather it IS levered to the price of North America Natural Gas, and NG Liquids. Specifically to the relative price of North Amer nat gas vs. world energy prices. That is the driver that spurs clients to do LNG, and big scale petrochem, pipelines, Gogen Power, and gas plants. It is also reliant on low interest rates to provide funding for large multiyear projects. All of those factors remain in place for now, so no change in award momentum, and no cancelled projects. If anything the slowdown in Fracland may improve the availability of craft labor, and reduce some labor costs on jobs already priced.
let it stay down a little longer. i like the price my dividends are being reinvested at.
yes, i did expect that. moved most of my holly funds into HEP. Still holding out hope that higher margin specialty refiner CLMT will keep their high payout. But, can't ask for more in div that company is netting from operations.
this is last of the small divvy. they are so going to raise it next quarter. cash is pouring in at these margins. faster than they can spend it.