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VOL. 124 | NO. 30 | Friday, February 13, 2009

Sector Snap: Refineries Climb on Higher Margins

AP

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NEW YORK (AP) - Shares of refining companies gained on Thursday on news that U.S. refining margins were mostly higher this past week and on expectations that the heavily shorted stocks will rebound.

Credit Suisse analyst Mark Flannery noted that refining margins – the difference between the cost of crude and the amount a company makes on refined products such as gasoline – climbed this past week. In the Rocky Mountain region, margins rose 22.6 percent to $17.13 per barrel. Gulf Coast margins rose 17.3 percent to $12.97 per barrel, while West coast margins gained 12.7 percent to $27.45 per barrel. Midwest margins climbed 6.7 percent to $10.78 per barrel, while Northeast margins slipped 15.7 percent to $8.48 per barrel.

Meanwhile, crude oil prices slid 23 cents to $42.25 per barrel in Thursday afternoon trading. Oil prices have fallen more than 70 percent since their record high of $14.27 hit last summer.

Flannery also said that the latest short interest figures showed that independent refiners remained a heavily shorted group, which could point to climbing share prices in the future. Investors often expect heavily shorted stocks to rebound as short positions are covered.

For example, Tesoro Corp. was a heavily shorted stock several months ago, and it has almost doubled in price since then, Flannery said. In addition, the short interest ratio remains above one-and three-year averages for refiners Alon USA Energy Inc., Frontier Oil Corp. and Western Refining.

Alon shares rose 37 cents, or 3.1 percent, to $12.39 in Thursday afternoon trading. Shares of Frontier Oil rose 25 cents to $16.15.

Elsewhere in the sector, shares of Western Refining Inc. jumped 85 cents, or 6.8 percent, to $13.35. Tesoro shares climbed $1.15, or 6.5 percent, to $18.83.

Shares of Valero Energy Corp. rose 86 cents, or 3.7 percent, to $23.88. Shares of Holly Corp. rose 58 cents, or 2.3 percent, to $25.79.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 66 66 13,508
MORTGAGES 76 76 15,642
FORECLOSURE NOTICES 11 11 2,150
BUILDING PERMITS 0 0 27,758
BANKRUPTCIES 67 67 8,717
BUSINESS LICENSES 21 21 4,586
UTILITY CONNECTIONS 32 32 5,425
MARRIAGE LICENSES 28 28 2,922

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