Gas prices have soared in the aftermath of hurricane Ike due to damage inflicted on major Gulf Coast refineries. Unleaded regular has risen 17 cents since the storm hit to reach $3.842 a gallon. Money Morning’s William Patalon III says gas shortages from a tough hurricane season are likely to affect much of the Southern US.
Valero Energy Corp. (NYSE: VLO), the largest independent refiner in the U.S. market, is a well-known and avidly traded name. Despite being a member of the super hot energy sector, Valero has seen its stock price collapse from its 52-week high of $75.75 to Friday’s close at $34.72 (a 54% decline).
Refiners Valero (VLO), Sunoco (SUN), Holly (HCO) are up on falling crude oil prices. If predictions of OPEC’s president come to pass, we could see oil back at $70 — and U.S. refiners in the green!
Gold and silver started the week by rising slowly in price from the Globex open in the Far East through the London a.m. fix.
We’re frankly sick of trying to work out who or what is responsible for high crude oil prices. Whether it’s supply-and-demand imbalance in the markets, as Dave Gonigam argues, or nasty speculators artificially inflating prices, as Andrew Gordan says, we don’t know.
What we can say is that oil is still sky high at $139 a barrel.
Shock Market Trader editor Mike Burnick says there could be a painful correction around the corner. If there is, there’s one sub-sector of the energy industry that would actually benefit big time from such an oil correction: refiners…
Here at Money Morning over the past six months, we’ve talked a great deal about oil and gasoline prices. We’ve offered our predictions about how high those prices were going, and have detailed a number of investment opportunities - chosen as much for their margins of safety as for their profit potential.
An Open Letter to Congress: First there was the trillion-dollar pork fest for energy. Then there was the decision to go with corn-based ethanol.
Merrill: No More Capital Needed; German Bank Bayerische posts $6.7 Write-Down; Gas Prices Extend Record Run; Google Cuts 300 Jobs at DoubleClick; Silver Wheaton Triples Reserves; Northwest Loads Increase; Valero Completes Repairs; Consumer Debt Creeps Higher