iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
19,892 Blog Posts

A TITANIC SHIFT IN THE OIL MARKETS ARE UNDERWAY

This is a very important point I am about to make to you. WTI is surging, as predicted by the July seasonality stats. It’s amazing how trends keep repeating themselves. Anyway, the WTI-Brent spread is now under $3, which places the refiners, especially mid-continent refiners, directly into the ‘fag box.’

Look at the shares of ALJ, DK, HFC, WNR, PSX and CVI, all drowning in oil. The pendulum swings the other way and when it does, it cuts hard.

The refiners could be ‘epic’ buys here, if indeed the spread is set to widen again. After all, all of the experts believe that is will. I happen to think a ‘pain trade’ is taking place here, which will inevitably result in a flush out. This is not that.

I’ve been a shareholder of the WNR for many years, on and off, all the way down to $11 per share. The stock defies logic and reason on a regular basis. I do not think $27 is a bargain for the shares. I will look to get in under $20.

On the other hand, surging oil prices is good for a number of sectors, such as solar, alternative energy and good old fashioned exploration plays who bank coin off the price of oil going higher.

Top performers in the oil space, over the past two weeks, include: HNR, EGY, XCO, ROSE, GST, HK, KEG, HERO, WLL and CLR. But the space is entirely ignored by the investment community. There is a lot of potential upside to this industry, if the price of oil continues to trend higher.

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6 comments

  1. Ray Donovan

    oil up but FRO is goin full Brutha…dont get it?? please explain how FRO is up WITH oil??

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    • casey

      shipping rates could be rising or holding, which is very positive for this sector.

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      • Ray Donovan

        not being privy to rates I can only assume what FLY told us the other day. That he was NOT happy with the current rates and would seek further purchase of FRO when OIL went DOWN… that is contrary to the events of today… OIL is up and so is FRO, hence the question…and if rates are suddenly better, wouldnt they be offset by the oil increase?? thereby making the stock flat as opposed to UP 5+%??

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  2. prime

    Fly,

    Are you stalking KWK at these levels?

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  3. tapefigher

    because the FRO is a numbers game of ships…the first company to go bankrupt leaves the winner will all the battleships!!!

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  4. wilmer

    Could rising oil be the real reason behind the Fed’s new hawkish tone?

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