VLO - Update: Goldman sees record diesel fuel margins sustaining
Update: In another sign of impending distillate fuel shortages, jet fuel traded at ~$320/b in New York Monday ($7.61/g), a ~$200+ premium to crude feedstock prices. The jet fuel premium is ~10x larger than any premium seen in the past ~30yrs. Par Pacific (PARR) has the most exposure to distillate margins, specifically jet, of any US refiner: In a note Sunday, Goldman's commodity team wrote that a new pricing regime for oil (USO) requires "demand destruction" for oil products. However, as high prices lead to falling demand for products like gasoline, Goldman expects distillate fuel demand to remain strong and margins to remain high. The note points to several key factors which will lead to higher distillate fuel margins: Diesel and jet fuel stocks are at historic lows, and seasonally-adjusted inventory draws are large and accelerating. Jet fuel consumption is poised to accelerate into summer with a return to international
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Update: Goldman sees record diesel fuel margins sustaining