Wednesday, September 10, 2008

Refiners, crack spread

I can't seem to find a good source for the crack spread. So I decided to plot my own.

First a look at USO, a proxy for oil.

Notice that oil is back at the March levels, with a peak in July.

Now a look at UGA, a proxy for gasoline.

We are again, back to the March levels, with a peak in July.

Here is the chart of the UGA (proxy for gasoline) - USO (proxy for oil), which should be a good approximate for the difference in gasoline and crude oil (aka the crack spread).

You can see the pain the refiners were taking as oil peaked in July. However, we are now back to March levels with momentum to the upside. Can the refiners recover from the big hit they took during the last few months?

Now a look at the refiners, which have still been struggling.

WNR is right at a recent high, which could act support. It is also right above the 20 and 50 DMA. This can provide a great buying opportunity if refiners come into favor.

Days To Cover (Short Interest Ratio) 7.8 Very Nice.

TSO is much weaker. It is testing a recent lower low. If you buy here, at least the stop will be easy to set.

Days To Cover (Short Interest Ratio) 4.7 Nice.

FTO is still consolidating and trying to form some support. This is very healthy.

Days To Cover (Short Interest Ratio) 4.1 Nice.