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Refiners

#Gasoil Update Gasoil Elliott Wave story is less controversial than Crude Oil story . The price rests on Moving Averages support and Gasoil crack appears to be on an upward trend too. This suggests that refinery margins are likely to improve. In practice, this means that Gasoil prices are likely to grow faster than Oil prices, perhaps due to unsatisfied demand for diesel fuel. What I also dislike a bit here is that wave (ii) seems a bit too complicated, being a combination of flat w, simple zigzag x and another simple zigzag y. I was taught that although possible such combinations are rare and shall be used only labeling in retrospective when no other alternatives fit. Now it is part of the ongoing trade and if I am proven wrong I will have to stricten my rules about this combination.
VANTAGE:GASOIL
by Fomenka
It's the energy, babyINVESTMENT CONTEXT Inflation in the UK reached 9.1% in May, up a tad from 9.0% reading in April IEA warned the EU to brace for a potential full cut of energy supply from Russia, with outsized repercussions on the bloc's GDP Germany’s finance minister called the EU ban on sales of combustion engines cars by 2035 a “wrong decision” Goldman Sachs upped its latest forecast for probability of a recession over the next two years from 35% to 48%; ARK's CEO Cathie Wood identified in the Fed's excessively tightening monetary policy a cause that could plunge the economy into recession On June 21, ProShares launched its Short Bitcoin Strategy ETF (BITI), the first inverse exchange-traded fund linked to BTC, which allows investors to bet against the world's largest cryptocurrency by market cap Crypto exchange FTX extended a USD 250mln credit line to crypto lender BlockFi, shortly after bailing out crypto broker Voyager Digital with a USD 485mln loan PROFZERO'S TAKE All Profs timely highlighted the criticality of energy driving the next steps of the ECB monetary policy - other than hopefully accelerating replies from the industrial side, in an effort to ensure greater security and diversification of supply to the continent. Now those warnings are coming to the fore. The Central Bank of Spain estimates a full halt of energy supplies from Russia would plunge EU GDP by between 2.5% and 4.2%; Goldman Sachs locates the crunch at 2.2%, with sizable impacts in Germany (-3.4%) and Italy (-2.6%). Risk management predicates the "build back better" doctrine - when a major crisis strikes, opportunities arise for decision makers to rebuild infrastructures, making them more resilient. Profs really hope this time the EU won't turn a blind eye to the opportunity of pursuing for once a coordinated, integrated, energy strategy The escalating narrative between U.S. President Biden and the energy sector majors regarding lifting energy output is starting to look paradoxical to ProfZero. According to EIA, U.S. crude oil production was 17.44mboe/d in Q2 2020, at the trough of the pandemic (on April 20, 2020, WTI futures closed on negative territory at USD 37.65/boe below zero); it took 5 quarters for the industry to add 1.5mboe/d, setting production at 18.94mboe/d in Q3 2021, and yet 3 more quarters to add another 1mboe/d (output in Q2 2022 is estimated at 19.94mboe/d). U.S. production broke through 20mboe/d only once in history, on Q4 2019 - at the peak of the previous economic cycle. President Biden demand to hike internal output in a bout to put a lid on retail fuel prices looks therefore hazardous; it would heavily backtrack on the much-touted energy transition off from fossil fuels, while amassing capital investment in a sector that has been demonstrated to require entire quarters before its output may adjust. Even deeper into detail, U.S. refining capacity plummeted from all-time high in - guess when - Q2 2020 at 17.72mboe/d to 15.56mboe/d in Q1 2022, owing exactly to the energy transition kicking older plants off the industry, while leaving higher margins ("crack spreads") to those who stayed. As much as soft commodities, the move off from crude oil into natural gas has been taken for granted for too long. Policy makers were swift to point the finger to the bad guys; but too little was done to build the infrastructures of the energy of the future. A few more refinery runs won't make up for the problem PROFTHREE'S TAKE Out of the crude oil frying pan, into natural gas fire - mindful of coal burn. The Netherlands lifted limits on its three coal-fired power plants from 35% to full capacity until 2024; similar measures were undertaken by Austria, Germany and Italy as Russia goes all-out on natural gas curtailments. European Commission President Ursula von der Leyen urged Europe not to "backslide" its long-term commitment to cut fossil fuel usage, and to remain focused on "massive investments in renewables". ProfZero and ProfThree's eyebrows are as high as TTF gas prices - with but 4 months ahead of winter season, and the notorious impossibility for renewable energy to be stored, Profs are in fact fearing a much more worrisome backslide for the EU - one into full energy recession
CME:BTC1!
by ProfZero
WES - Potential Inverse H+S - $9.00 TargetQuick pattern update here. WES appears to have an Inverse H+S pattern forming on the lower timeframe. A clean break from the pattern would target the $9.30 range, setting a conservative exit, with a close below the purported right shoulder would minimize potential for losses. WES has been one on my list for a while lately and I recently closed a position for over 170% gain. The news surrounding oil prices is negative, however WES is a refiner not a producer, so WES, if anything would have benefited (in the short-term) with the negative May contract prices. I may look to do a more detailed write up on WES in the coming day or so, concerning position details. -TradingEdge
NYSE:WESLong
by Profit_Link
2
Short MPCIf oil takes a significant dip overnight, I will be short MPC. I don't think there is any fundamental to support this stock to the upside anyways, so I am shorting calls. Plus I am not much of an options buyer unless to trying to hit a home run. The blue line represents options expiration day. These are 4h bars. Important to note that NOT all refiners are trading in tandem. MPC and TSO are down today, while HFC, PSX, and VLO are all up. Note TSO and HFC report their second quarter 2016 results 8/3.
NYSE:MPCShort
by nodiggity
HIGH VOL: KEEP WATCHING!!!Look guys, this is the same Fib retracement that has HELD since the Jan-Feb selloff. Do not take my word for it. Look at my previous predictions, load the new data, and see how much money was made. MPC has had a history of bucking the market. When SPX was down 2%, this was down 7%. When SPX was up 3%, this was up over 8.5%. This is a lower liquidity, higher volatility play. I am NEUTRAL on MPC. To be honest, I've put no money into for a long time. Money could have been made straddling the 2nd fib level, but the reaction to Brexit (not the market reaction to Brexit itself) has caused everybody to look at everything closer, and rightly so.) Here's what we know: MPC is range-bound in the 2nd fib level. We also know it's good for a 8% pop or drop in a one session. Is that within your risk tolerance?? It's not within mine. Conclusion: IF YOU DO NOT HAVE TO TRADE, DO NOT TRADE. I honestly would not look at this stock until after earnings (July 28th). That will give the market plenty of time to digest new capital inflows from stock buy-backs, and allow for a reaction that may be based on technicals vs. fundamentals. There is money to be made, but patience is a virtue. If you see something I don't?....Please share! I need to eat too...
NYSE:MPC
by nodiggity
1
Cash in: No hold weekend for meNo reason to hold anything over the weekend unless you have to. Something smelly about the markets. I can feel the SPY wanting to sell. MPC rallied up testing 37.00 fib level. It tested that level and it did not breach. The chart indicates overall bullish. It has/is building a nice $35 floor for itself. THE MODEL HAS NOT BEEN RE-DRAWN AND MPC IS TRADING PER THOSE FIB LEVELS SINCE MY FIRST MPC FIB POST. You can put a strangle on at 37.00 and 35.00 if you can afford to be that close to the money, but my money is better off elsewhere. Now, if it rallies to $37.80, that'd make a nice cup formation. MPC has history of cup-and-handle breakout (see older chart). Now, if you have followed my posts, you will have noticed me repeatedly saying that MPC has a history of bucking the SPY. It has. With that said, it's outside my own personal risk appetite. Have a good weekend!
NYSE:MPC
by nodiggity
1
Stay Long MPCIf you went bullish on calls per my previous post, you are enjoying a nice pop today. My time horizon is longer so I am holding until $38.75 (the next fib level). The MA just crossed and I want that to marinate for a few sessions. You should be just playing with house money now if you bought the day or day after I posted. This is technicals-only trade devoid of any fundamentals if that had to be said for this website! The narrative is refiners have been oversold for the past couple weeks. The market has realized that now. I'm not paying attention to anything in action in CL or any news about Nigeria. That is all noise to me. The only thing I'm paying attention to is that MA cross and the two fib lines that define my stop/sell positions.
NYSE:MPCLong
by nodiggity
Buy MPC callsGet em while they're cheap! You might find cheaper premiums on HFC as they nose-dived yesterday, but MPC has stronger fundamentals IMO. And a reminder like always, MPC has a history of bucking the market the market: SPY. In regard to fundamentals, this is an oversold reaction to MPC and other refiners' posting losses for Q1 2016. We all knew the refining margins honeymoon would come to a close eventually. This is a response not in rising crude prices, but rather a response to the lack of rise of gasoline prices (the other leg that makes up the refining crack spread).
NYSE:MPCLong
by nodiggity
2