Tuesday, April 10, 2007
Crude oil on Monday managed to decisively bust below the 200 day moving average with a 4% slide. Interestingly enough, my refinery play - Sunoco (SUN) only slipped 8-cents on the day. One large factor in supporting refiner shares is the on going slide in gasoline stockpiles. The RBOB to crude crack spread is also at just above $25, meaning refiners are still literally minting money in making gasoline. While the latest COT data showed excessive purchase of WTI contracts by funds, there's still a good chance that gasoline could move higher even if crude falls further. We'll have a better idea once inventory data comes our way on Wednesday.