Crack Spread

[rovo]

My area has gasoline today at $3.43 to $3.47. It dropped quite a bit in the last two days.

[yclept]

Here's something to make most all of you feel better about the prices you're paying for gas:

www.oaklandgasprices.com/san_leandro/index.aspx

www.oaklandgasprices.com/Price_By_County.aspx?state=CA&c=usa

[clarkrl2]

Category	Current	5 Week MA
Oil Inventories xSPR	-0.62%	0.02%
Gasoline Inventories	0.62%	0.54%
Refining Capacity	90.30%	89.30%
Gasoline Prices	-0.67%	-0.10%
Crack Spread	33.74	33.475

With the crack spread over 30 HFC, TSO, and VLO should still be able to make a good profit this quarter. Hurricane season can have a big impact on gasoline prices or shut down refiners. I posted a link with locations of refineries earlier and will look for east coast refineries later.

Week	Oil	Gasoline	Retail Gas
Current	85.12	2.76	$3.58
Last	81.32	2.65	$3.60
Two ago	82.09	2.77	$3.67
Three ago	91.35	2.9	$3.71
Four ago	97.13	3.1	$3.70

I still have a bull put spread on VLO with 22/20 strikes. The price of Valero went up this week. My call spread on SUN expired out of the money. They use more expensive oil than the WTI and I made that trade based on another screen I run. Still a bad trade is a bad trade.

[clarkrl2]

Some eastern refineries of major publicly traded companies are SUNOCO Philadelphia Pennsylvania, Conoco Phillips Linden New Jersey, Conoco Phillips Trainor Pennsylvania, SUNOCO Marcus Hook Pennsylvania. Delaware City Refining company also has some large refineries in the east but I don't know if they are publically traded or not. Here's the link with the locations and daily output. www.eia.gov/neic/rankings/refineries.htm
I don't know if any of these are in the hurricane path but all produce enough barrels that if they are temporarily closed it might have an impact on prices. It would likely have some benefit to companies unaffected by hurricanes and hurt those that were affected by hurricanes.

[clarkrl2]

I am a day late on the update due to be extremely busy. Next weeks data won't be released until Thursday because of the Labor Day holiday.

Category	Current	5 Week MA
Oil Inventories xSPR	1.51%	0.89%
Gasoline Inventories	-1.32%	-0.26%
Refining Capacity	89.20%	89.25%
Gasoline Prices	1.31%	0.82%
Crack Spread	34.9	33.445

The crack spread is still above 30 which means the refiners are likely to have very good earnings for Q3.

Week	Oil	Gasoline	Retail Gas
Current	88.72	2.89	$3.63
Last	85.12	2.76	$3.58
Two ago	81.32	2.65	$3.60
Three ago	82.09	2.77	$3.67
Four ago	91.35	2.9	$3.71

Valero is buying a Meraux Louisianna refinery from Murphy Oil. I still own a bull put spread on VLO. The PE on Holly Frontier is the lowest of three I follow and their forward PE is also the lowest. They had a 2:1 stock split this week. HFC also now has a larger market cap than TSO which is an S&P 500 company.

[clarkrl2]

Category	Current	5 Week MA
Oil Inventories xSPR	-1.12%	-1.29%
Gasoline Inventories	0.10%	-0.32%
Refining Capacity	89.00%	89.80%
Gasoline Prices	1.30%	0.15%
Crack Spread	34.41	34.89

Crack spread remains above 30 which is good for the refiners.

Week	Oil	Gasoline	Retail Gas
Current	89.07	2.88	$3.67
Last	88.72	2.89	$3.63
Two ago	85.12	2.76	$3.58
Three ago	81.32	2.65	$3.60
Four ago	82.09	2.77	$3.67

I still have a bull put spread on VLO.

[clarkrl2]

Category	Current	5 Week MA
Oil Inventories xSPR	-1.90%	-0.35%
Gasoline Inventories	0.96%	-0.34%
Refining Capacity	87.00%	88.05%
Gasoline Prices	-0.35%	-1.13%
Crack Spread	28.52	30.79

The crack spread has fallen below it's 5 week moving average. It's still well over the price refiners need to turn a profit. Earning for the refiners for 3rd quarter should be very good.

Week	Oil	Gasoline	Retail Gas
Current	88.8	2.72	$3.66
Last	89.07	2.88	$3.67
Two ago	88.72	2.89	$3.63
Three ago	85.12	2.76	$3.58
Four ago	81.32	2.65	$3.60

I still own a bull put spread on VLO. Even though the crack spread is still high enough for a good profit it can fall as quickly as it rose.

[clarkrl2]

I'm a day late with the update.

Category	Current	5 Week MA
Oil Inventories xSPR	-2.14%	-1.38%
Gasoline Inventories	1.57%	1.09%
Refining Capacity	88.30%	89.30%
Gasoline Prices	-1.64%	-1.15%
Crack Spread	30.86	32.3

The crack spread is back over 30 but still below the 5-week moving average. The refiners should have a very good 3rd quarter.

Week	Oil	Gasoline	Retail Gas
Current	80.86	2.56	$3.60
Last	88.8	2.72	$3.66
Two ago	89.07	2.88	$3.67
Three ago	88.72	2.89	$3.63
Four ago	85.12	2.76	$3.58

I still own a bull put spread on VLO. TSO and HFC have faired better but VLO is trading near it's 5-year low of 15.77 compared to today's close of 18.57.

[clarkrl2]

Category	Current	5 Week MA
Oil Inventories xSPR	0.59%	1.05%
Gasoline Inventories	0.37%	-0.48%
Refining Capacity	87.80%	88.50%
Gasoline Prices	-2.55%	-0.62%
Crack Spread	31.21	33.055

As the 3rd quarter comes to a close the crack spread remains above 30. The refiners should report good earnings next month.

Week	Oil	Gasoline	Retail Gas
Current	81.21	2.59	$3.51
Last	80.86	2.56	$3.60
Two ago	88.8	2.72	$3.66
Three ago	89.07	2.88	$3.67
Four ago	88.72	2.89	$3.63

I still have a bull put spread on VLO.

[clarkrl2]

Category	Current	5 Week MA
Oil Inventories xSPR	-1.38%	-1.25%
Gasoline Inventories	-0.56%	-0.23%
Refining Capacity	87.70%	88.35%
Gasoline Prices	-2.17%	-0.44%
Crack Spread	32.51	33.46

The crack spread remains over 30. This week the oil and gasoline inventories both fell.

Week	Oil	Gasoline	Retail Gas
Current	82.57	2.68	$3.43
Last	81.21	2.59	$3.51
Two ago	80.86	2.56	$3.60
Three ago	88.8	2.72	$3.66
Four ago	89.07	2.88	$3.67

I still have a bull put spread position on VLO.

[clarkrl2]

The crack spread dropped nearly 15% today on plans to reverse the seaway pipeline. Brent crude was down and WTI was up. This will adversly affect most of the companies where the earnings come from the margins on the crack spread. VLO is down more than 6%.