PSX - Goldman lays out refining bull case - upgrades DINO to buy cuts MPC to hold

Last Friday, when asked why fuel prices were high, the Saudi Energy Minister said, "the bottleneck is now to do with refining ... many refineries in the world, especially in Europe and the US, have closed." In a note Monday, Goldman's refining and Integrated analyst said "a unique set of circumstances has set off a bullish backdrop in global refining" noting that, "a rash of capacity retirements, reduced Russia exports following the Ukraine invasion, recovering jet fuel demand, changes in China export policies and tight global inventories for product, particularly distillate" have all supported margins.  While Goldman doesn't expect current margins to sustain indefinitely, continued tight inventories through the remainder of the year and into 2023 are expected to result in elevated profitability. Goldman's earnings estimates for refiners are 24% / 40% above street estimates in 2022 / 2023. On average, Goldman reduced target valuation multiples, though spiking margins lifted

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Goldman lays out refining bull case - upgrades DINO to buy, cuts MPC to hold