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Jinxed it!
Like clockwork, I posted how stable refinery margins have been, and the next two days cracks drop off a cliff. It's not time to panic yet, we are still above the 3Q low which was on 8/8, but it's definitely something to watch.

My bet is that this is a short term drop due to inflation/recession fears. I don't see any fundamental changes in the sector.

Nothing that happens in the next two weeks will have much of an effect on 3Q earnings (they are going to be good), but guide's may suffer if it looks like the trend continues down for very long.

It's going to be an interesting earnings season.

I've modeled daily crack spreads over the 2nd & 3rd quarter, along with rates, and working to extrapolate projected earnings for some (mostly) pure play refiners. I see them all doing well from a historical perspective, but there are some definitive divergences from analyst estimates.

It will be interesting how well my model holds up, and how guides might affect price regardless of earnings actuals.

I'm still refining (pun intended), but will post more data when the Q ends.

It's been a rough week in the market across all sectors, so good luck today, and have a fantastic weekend!

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