American Eagle Outfitters, Inc. Message Board
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20-25% of total US petroleum product export. US export around 17.3 million barrels of finished gasoline product. VLO is the top exporter. Ever wonder why gasoline is staying up there while we have so much oil coming out of the US drilling from shale formation? Because we export a lot of gasoline. There are tons of pipeline being built as well as rail transport. So if the matra of the day is "drill baby drill", then the refining capacity can't keep up, hence oil prices go down.
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VLO has the ability to export.
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I've indicated target date for the beginning of the collapse in Bakken oil drillers is in the Fall. I'm averaging up as they all go up.
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My thesis assumes that greed begets greed, which means drill baby drill. But, if the light sweet oil from the Bakken which increasingly is being supplemented by Eagle Ford cannot be refined it has nowhere to go. The demise of the drillers is their success. Saudi oil is being processed by VLO in Lousiana. But, VLO will process cheaper light sweet oil and import less heavy oil from Opec. Also, there are more new oil coming from Libya and Irag and the non-Saudi's will and are already cheating, which means more oil coming in the market at the same time there is less demand.
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Exactly! They are drilling like crazy. Where you going to put the light oil when there is maxed out refining capacity? If it has to go to storage in Cushing, which is almost maxed out as well, guess what will happen.
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Bakken oil is light oil. The Saudi oil is heavy. Refining capacity for light is is maxed out. Therefore, if they can't process the oil, the price has to come down. And Eagle Ford is closer to the Valero refinery than Bakken. Therefore the further North you are, the cheaper the oil.
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One more thing, due to more fuel efficient cars, there is less demand...so again supplies overwhelms demand and demand in the fall and winter will be lower as you know. So by 3rd quarter there will be panic for the Bakken drillers.
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Economics 101 says too much supplies lowers price. There are just too much oil drilling going on right now int the Bakken and Eagle Ford. The supplies is overwhelming refining capacity for the light oil. I'm long VLO that can buy cheap Bakken oil and then sell gasoline domestically and export it to Europe as well. Watch by third quarter... Bakken drillers are going to sink fast.
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The red carpet is out for you Mr. Icahn.
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My guess, we have seen the high forever @$57 and will see 52 weeks low in a month.
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I'm keeping it and see what shakes out on earnings. The shares needed to be punished for earnings disappointments, but in my view it is overdone way overdone. Looking for $28 as the base in 3 months. Good divi as well. Low risk to the downside. I only play the risk/reward. There is more chance it is going up than down at this level.
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CLF announced their date for earnings report. Any smart poker player knows the real big news is that they did not pre-announce a BAD earnings at that time...so it means they are going to beat and the stock already bottomed 3/27. The short play is very risky at this point.
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13F filing coming out soon. I noticed accumulation of shares starting last March 7th. Whoever is buying did not want to spike the shares...it has been strategically done.