With this morning’s move lower in WTI crude, the Brent-WTI spread is now more than $10 again. Just a short while ago Brent traded at a discount to WTI, causing many to flee the refiners, scared of their own shadows. However, now that the spread is widening again, Mid-continent refiners are back in play, the rage of Wall St.
As such, Goldman Ball-Sachs upgraded DK this morning. I expect all refiners to trade higher today, and for many weeks to come, which is why I went long ALJ on Friday (time machine).
Other refiners worth exploring are ALDW, TSO, HFC, WNR, PSX, MPC and CVI.
As for ALJ, with 29% of the shares sold short and spreads widening again, I predict extreme hardship for those embedded in a bearish position here. The stock can easily rise to a level seen just 6 months ago, or $17.