Summer Driving Season is not to far away causing the demand for gasoline to rise together with the worth per gallon. Thar Want to take make some cash and advantage of this event? There is a seasonal sample to the value of gasoline that rises in the spring as refiners transition to summer season grade grades. This worth rise begins on the West Coast the place refinery capability is at a premium.
So what are you able to do to assist pay for those greater gasoline bills? Well, how about shopping for a refiner who advantages from the rising worth of gasoline. In case you have enough cash to purchase a refiner, then you don’t should learn the remainder of this piece. Otherwise there are several firms that may fill the invoice including Western Refining WNR) and Alon Power (ALJ).
Western operates a refinery in El Paso, TX and hopes to shut in April or May 2007 on the acquisition of Large Industries with their refineries within the Four corners area in New Mexico and Yorktown Virginia. This can virtually double the corporate’s refining capacity, making the corporate the nation’s fourth largest publicly traded, unbiased oil refiner.WNR may also greater than double the amount of cheap sour and heavy grades of crude it might probably process to 25% of its overall capability. This should help to increase their margins and consequently their profitability.
Alon Vitality with their current acquisition of refineries on the West Coast should benefit from the higher gasoline prices there as nicely, generating a optimistic impact on the margins of the company. With the acquisition of Edgington and Paramount, administration expects to increase the barrels per day from acquired refineries from fifty one,000 per day to ninety,000. In the 4th quarter of 2006 they achieved 60,000 barrels per day, a rise of 9,000 barrels per day. The company will even add a hydro cracker to the California refinery to improve margins. ALJ also is the biggest supplier of asphalt in California and Arizona, and the quantity two provider in Texas. The corporate is experiencing higher than expected demand for asphalt and so they haven’t even hit the peak summer paving season. Additionally they are promoting all the diesel they can make, which carries a higher margin than gasoline.
Remember that Valero’s (VLO) McKee refinery not too long ago had a serious hearth that will doubtless remove about 1 percent of US refining capacity for a couple of month. While not loads, it is sufficient to spoke the markets.
Look to purchase on dips in price in late winter or early spring earlier than the worth of gasoline sometimes rises. Look to promote when the worth of gasoline peaks.
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