Barclays on U.S. Independent Refiners: PC Weekly DOE Inventory Analysis
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Rating Summary:
17 Buy, 3 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
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Barclays on U.S. Independent Refiners: PC Weekly DOE Inventory Analysis
Analyst, Paul Y. Cheng, said, "Following the announcement of the Seaway pipeline sale and its partial reversal by early next year, the Brent/WTI spread has dropped down to approximately $9-10/bl from a 3Q11 average of $25.0/bl and a QTD average of $21.4/bl. From now until the reversal, we expect the spread will remain at the current level before falling to approximately $7/bl by 3Q12 after the partial reversal comes on stream. We continue to like Tesoro (NYSE: TSO), Valero (NYSE: VLO), and Marathon Petroleum (NYSE: MPC) based on our analysis of a $5/bl Brent/WTI differential as we believe the market has underestimated the group's strong earnings power and valuation in the coming seasonal trade. Based on current inventory trends, the great excess in light product inventories has now diminished and we expect light product margins to improve from current levels over the next several weeks."
"According to the DOE, current US commercial oil inventory built 1.3 mmbls, total mogas inventory increased 5.1 mmbls, and distillate inventory increased 2.5 mmbls. This compares to the API data showing a 5.0 mmbls draw in crude, a 6.0 mmbls build in gasoline, and a 1.7 mmbls build in distillate inventories."
"Gasoline inventories were up across the board...Total US primary light products (gasoline, distillate and jet fuel) built 7.8 mmbls from the previous week's level."
Analyst, Paul Y. Cheng, said, "Following the announcement of the Seaway pipeline sale and its partial reversal by early next year, the Brent/WTI spread has dropped down to approximately $9-10/bl from a 3Q11 average of $25.0/bl and a QTD average of $21.4/bl. From now until the reversal, we expect the spread will remain at the current level before falling to approximately $7/bl by 3Q12 after the partial reversal comes on stream. We continue to like Tesoro (NYSE: TSO), Valero (NYSE: VLO), and Marathon Petroleum (NYSE: MPC) based on our analysis of a $5/bl Brent/WTI differential as we believe the market has underestimated the group's strong earnings power and valuation in the coming seasonal trade. Based on current inventory trends, the great excess in light product inventories has now diminished and we expect light product margins to improve from current levels over the next several weeks."
"According to the DOE, current US commercial oil inventory built 1.3 mmbls, total mogas inventory increased 5.1 mmbls, and distillate inventory increased 2.5 mmbls. This compares to the API data showing a 5.0 mmbls draw in crude, a 6.0 mmbls build in gasoline, and a 1.7 mmbls build in distillate inventories."
"Gasoline inventories were up across the board...Total US primary light products (gasoline, distillate and jet fuel) built 7.8 mmbls from the previous week's level."
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