VLO - JP Morgan forecasts higher for longer refining margins

JP Morgan's integrated oil and refining analyst Phil Gresh updated his refining forecasts Tuesday, citing a long list of bullish trends, while flagging recession risk. Phil sees current margins normalizing to nearer historic averages in 2023, but says a bad hurricane season could lead to "running out of refined products for a period of time." Following Goldman's bullish refining note Monday, it appears Wall Street is beginning to position for a shift in the sector. With Goldman and JPMorgan echoing points made by Saudi's energy minister late last year. Gresh hits on all the key themes. Demand has recovered to pre-covid levels, while ~3mb/d of refining capacity has been removed from global markets. China's pivot on product exports has tightened Asian markets, while Russian export impacts have created deficits in Europe. In the very near term, an exit from spring refinery maintenance is expected to add 2.0-2.5mb/d of supply, though

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JP Morgan forecasts "higher for longer" refining margins