Refiners are exposed to global oil demand growth, so strong absolute performance is a difficult case amid bad economic data. But, relative to the rest of energy, we believe Gulf Coast oriented refiners can continue to outperform as IMO 2020 signals clearly come through.
Search Coverage List, Models & Reports
Search Results1-10 out of 91
Underlying figures and additional commentary inside. Overall takeaways are neutral. The modestly better than consensus crude draw we project is offset by August MTD AG-OPEC exports showing an uptick from July, and Other Swing exports which remain elevated.
We have reformatted and added to the Product Pulse, our Refining monthly. What’s new are commentary to exhibits, a permanent section of Octane values, and a monthly sector EPS mark-to-market. The report continues to include regional crack spreads, ClipperData refined product exports, and China National Bureau of Stats data. As a result of augmented content inside, the front page is more high-level.
Underlying figures and additional commentary inside. Overall takeaways are neutral. A bearish inventory build forecast relative to consensus and Other Swing exports remaining on the high side are offset by materially lighter AG-OPEC exports in July.
Underlying figures and additional commentary inside. Overall takeaways are slightly negative. Our inventory build forecast is bearish relative to consensus and Other Swing exports remain high, though AG-OPEC exports for July MTD have dipped from the previous week and are running materially less than June.
A month ago, we argued that Midstream investments by Gulf Coast Refiners were underappreciated for their synergistic effect, potentially contributing to light/sweet crude discounts in the Gulf Coast. We argue structural light/sweet oversupply is driven by a commercial limit to export demand, as opposed to a physical constraint. Early days of Refiners’ 2Q19 earnings clarifies a key input to this point – max light crude runs at refineries are a moving target not easily predicted, because it requires a forecast of naphtha prices.
Underlying figures and additional commentary inside. Overall takeaways are neutral. While our inventory draw is far above consensus, the hurricane effects make it a one-off. Elsewhere, East/West AG-OPEC export trends remain unchanged, July exports are trending back toward June levels and Other Swing supply has stayed elevated.
The market is focused on a seemingly poor outlook for Brent/WTI differentials, however crack spreads in the Mid-Continent region are firm. This would suggest an out-of-consensus opportunity in Mid-Con refiners (CVI, DK, HFC), and we see positive data points potentially emerging in 2Q earnings and 3Q revisions. However, the product balance will be tested in coming periods as regional refinery utilization recovers from lower than normal 2Q levels and holds peak throughput.
Trends in EIA weekly fuels demand data are improving, despite ongoing concerns on the pace of global demand growth. Typical drivers of gasoline and distillate demand in the US imply some potential for 2H19 mean reversion higher in demand, while the current trends do not resemble 1H08 in any way.
- 1 of 10
- next →