July 22, 2011, 7:33 pm
Oil pipelines feed into 575,000-barrel capacity storage tanks at the Enbridge Inc. Cushing Terminal in Cushing, Oklahoma
As part of our diligence in writing last week’s article “Canadian producers a safer way to play crude oil” we uncovered another interesting opportunity. In particular, we’ve noticed that Canadian integrated oil companies’ share prices have for the most part lagged the performance of refining margins.
A common way of tracking the direction of these margins is something called the 3-2-1 Crack spread. It is the pricing differential between crude oil and the petroleum products extracted from it.
For example, it measures the cost of purchasing three barrels of light crude oil against the price received when selling two barrels of gasoline and one barrel of distillate. This spre
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July 13, 2011, 12:16 am
A Note From Managing Editor Sara Nunnally: Let me be blunt… High crude oil prices are drowning our economy. On Tuesday, oil prices climbed back above $96 a barrel. Our trade deficit soared to $50.2 billion as we imported an average of 9.01 million barrels of crude oil every day in May — each barrel adding another $100 to our import tab.
These are huge numbers… but even bigger are the profits Big Oil is making off our unhealthy addiction to crude oil.
And they offer no apologies.
Indeed, their greed and laziness is notorious throughout crude oil’s history. It hasn’t just been in the past decade that oil companies have sought to suck as much profit out of a barrel of oil as possible.
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July 30, 2010, 8:24 pm
In 2007, Oil become of the most speculative investments before the market crash wiped out a lot of the money that helped pushed this commodity to nearly $150 per barell. Fast forward three years later and the BP fiasco in the Gulf of Mexico leaves one wondering whether oil companies, and BP in particular, will have a tough time earning a profit when the government will have to be a lot more strict about offshore drilling (and likely drilling altogether). Should investors avoid holding oil companies in their portfolios with this in mind or should they jump at the opportunity to own them while they are “bruised?”
Some large, institutional investors feel one way while others feel the other.
Reasons to Buy
In addition to the oil companies lacking common appeal, there has been a lot of selling pressure which has not only impacted BP’s price (although this one has been the hardest hit) but others in the segment. This
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