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EnvestorFirst (< 20)

Who Benefits From $80 Oil?



August 09, 2011 – Comments (2) | RELATED TICKERS: VLO , MPC , ANDV

$80 oil is not the best circumstances for energy investors and oil companies alike. However, there are some within the energy industry who could benefit from this. How exactly is this true?  Paul Ausick explains who could benefit and why.


 "An $80/barrel price would definitely be bad for big oil companies like Exxon Mobil Corp.(NYSE: XOM), Chevron Corp. (NYSE: CVX), and ConocoPhillips Corp. (NYSE: COP). Refiners, however could do better, especially those able to get WTI crude. US refiners situated along the Gulf Coast are essentially tied to Brent prices, while refiners further from the coast can get their hands on the cheaper WTI. That allows these companies to take advantage of the crude differential to achieve more margin.

 Of the refiners, Valero Energy Corp. (NYSE: VLO) is most closely tied to the Gulf Coast and higher priced crude. Marathon Petroleum Corp. (NYSE: MPC), Tesoro Corp. (NYSE: TSO), and Western Refining Inc. (NYSE: WNR) all have more plants outside the Gulf Coast region, and thus, a better chance to take advantage of wider refining margins."


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2 Comments – Post Your Own

#1) On August 09, 2011 at 3:49 PM, EnigmaDude (55.27) wrote:

Good post, and I noticed you added some picks today.  Seems like a good time to be picking up shares of oil companies with the price being pushed down temporarily.  I suspect that oil will be back above $90/barrel before too long.

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#2) On August 10, 2011 at 11:59 AM, EnvestorFirst (< 20) wrote:

I have been trying to build up my picks for a bit now, but finally got around to doing it! And, yes, now is a great time to pick up on oil before the next jump up. I would be happy to see 90 soon.

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