I
plan to be long at least toe-hold call positions in (VLO), (TSO) and (FTO) for
their conference calls but want to see 1) more discipline on the part of the
group in terms of utilization (surely you guys have some maintenance to do) and
2) continued stout gasoline and especially diesel demand (read on), before I
step in.
Imports Rally…Finally…
Crude Stocks - still in a funky (early) pattern for this time of
year.
GASOLINE: Demand destruction is modest at best.
Production Remains Light: At present the margins are better
for diesel and despite higher utilization gasoline production continues to ebb,
albeit slightly.
Imports Remain Within Normal Levels Despite Price. Speaks to
continued global tightness of refining capacity and a greater trend towards
production of diesel.
Gasoline Demand. Still above 9 mm bpd.
Gasoline Inventories - Unexpected Drop.
Or looked at from the EIA's perspective:
Odds & Ends
Analyst Watch: Goldman is marking their E&Ps to that new
price deck; here's the list of players affected that we traffic in around here.
How they remain neutral on some of these names (NFX for example) is beyond me
and really beyond me when you consider their own prices targets (as in, "we
think NFX is going to rise 27%, we feel pretty NEUTRAL about that). Talk about
asleep at the wheel. Sorry for the rant but NFX has a number of catalytic events
right around the corner (first Bakken tests, Mancos shales tests, and in July
their first dual lateral in the Woodford which over time should help drive
F&D there from the already low $2 level closer to $1 / Mcfe.
More Analyst Watch: This must be Goldman Sach's day. They're
taking the oil service sector to Attractive from Neutral. Wow, what took you so
long? I'm likely to re-enter longer dated (NBR) calls and may do a little
shopping from the list in driller big picture thoughts in Tuesday's post. UBS takes
(HK) target from $35 to $50.
