Thursday, October 3, 2013
Citigroup Picks Winners and Losers Among U.S. Refiners
The diverging earnings performance will result in positive price appreciation for some refiners - such as Valero (VLO) and Tesoro (TSO), which earn upgrades to Buy - but underperformance for others, such as on Alon USA (ALDW), CVR Refining (CVRR), Holly Frontier (HFC) and PBF Energy (PBF), which will remain pressured by narrowing price differences between WTI and Brent crude.
TSO will benefit next year from a tighter gasoline market in California, and VLO will benefit from wider heavy light differentials in H2 2014 as increased Canadian heavy crude flows to the U.S. Gulf coast, Citi says.
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