Stock Traders Blog

I brought western refining yesterday and I felt I was lucky that I made a small profit on it. It was closed down a lot today. It looks like the whole independent refinery sector is bearish. See the following Barron article. I didn’t know that before I brought into Western Refining

More Misery For The Refining Story

Oil refiners have been broad-sided by dismal fundamentals. As a group, they’ve tried valiantly to retreat from higher utilization levels. But the gap between the input costs of rising crude and the dismal pricing in their end markets has left the sector in something of a limbo. Fundamentals aren’t going to improve until the demand picture ratchets back up - something that has continued to seem remote, according to analysts watching the sector.

Credit Suisse said independent refiners have done the right thing by holding down utilization, but that the effort wasn’t a long-term solution to weak margins. Demand would need to recover before participants in the market could see some recovery - a prospect that the firm suggested looked remote.

Bearish as it is Western Refining has dropped from its recent height of $15 in the mid of May to now below $8, almost 50% drop. I personally like the idea of shorting the high flyer and buy in the dip. The question is how dip Western Refining can be. Many economist suggest recession will end starting next year. Next year doesn’t look remote to me. See Roubini VS Buffet

Related posts:

1. Bank Of America is Still Bullish But I Bought Western Refining Inc Instead
2. HyperInflation - The Bearish Root
3. List of Stock That are Trading Below Secondary Offering Price