01-04-2007
Western
Refining, Inc., headquartered in El Paso, Texas, is an
self-active crude oil refiner and marketer of refined
products, operating primarily in the Southwest region of the
United States, including Arizona, New Mexico and West Texas.
The company, which operates a refinery in El Paso, hopes to
close the transaction in the second quarter of 2007 on the
acquisition of Giant Industries with their refineries in the
Four corners area in New Mexico and Yorktown Virginia. On
February 27, 2007, Giant's shareholders voted to approve the
transaction. This will close double the company's refining
capacity,
building the company the nation's fourth largest
publicly traded, self-active oil refiner. WNR will
furthermore more than double the amount of cheap sour and
heavy levels of crude it can process to 25% of its complete
capacity. This should help to increase their margins and
ergo their profitability.
Alon Energy with their recent
acquisition of refineries on the West Coast should benefit
from the higher gas prices there as well, generating a
positive impact on the margins of the company. With the
acquisition of Edgington and Paramount, management expects
to accumulate the barrels per day from acquired refineries
from 51,000 per day to 90,000. In the 4th quarter of 2006
they achieved 60,000 barrels per day, an increase of 9,000
barrels . The company will moreover submitting a hydro
cracker to the California refinery to accompaniment margins.
ALJ also is the largest supplier of asphalt in California
and Arizona, and the number two supplier in Texas. The
company is experiencing rising than expected ask for asphalt
and they have not even hit the peak summer paving time. They
also are selling all the diesel they can make, which carries
a rising margin than gasoline.
Don't forget that Valero's
(VLO) McKee refinery recently had a serious fire that will
likely remove about 1 percent of US refining capacity for
about a month. While not a lot, it is enough to spoke the
markets.
Look to buy on lows in price in late winter or
early graduated before the price of gasoline typically is
rising. Look to sell when the price of gasoline peaks.
By
the way, the peak 1980s year for gasoline prices was 1981 at
$1.Finally, play the rise in the price of gasoline to be
prepared for our rising warm weather travel bills.
