that's right. FRY TIME. US interest rate hiked, russian soldiers died so many and need to order humans from syria, fears have come down. it's fry time!
Just as oil producers and consumers have the ability to hedge their exposure to volatile petroleum prices, refiners have the ability to hedge their exposure as well. In fact, one could argue that refiners face an even greater need to hedge than producers and consumers as their profit margins are based on the price of not one commodity, but at least two and often several: the price of their input (crude oil) as well as their outputs (bunker fuel, heating oil, gasoline, diesel fuel, gasoil, jet fuel, etc.). In order to mitigate their exposure to crack spread price volatility, many refiners hedge the crack spread by purchasing crude oil futures or swaps and simultaneously selling refined products futures or swaps as the results allows the refiner to lock-in or fix the refining margin. https://www.mercatusenergy.com/blog/bid/72741/an-introduction-to-crack-spread-hedging#:~:text=In%20order%20to%20mitigate%20their,or%20fix%20the%20refining%20margin.
With such high crack spread , HY make a lot of money at physical market but may loss in hedging Assume crack spread profit 513 m hedging loss 250m inventory gains for Jan -Feb= 256m lets see is this Q can challenge HY highest EPS Record of 120.59 in 2017?
HY sacked the previous risk management committee head who lost bets, replaced with mainland Chinese. With mainland Chinese in place, they sure have first hand info.
All the crack spread data are subjecting to hedging which resulting in huge loss of HY! We witnessed it few times in the past QR! Read this x1000000000000000000000000000000000000000000 before you click the buy button!
running dogs in ib are worrying retailers long hy , so they come out to spread all kind of -ve news. regardless oil price up or down, so long as consumption increase, hy and petronm going to be profitable in long run.
If you understand Petrodollar, you'll know why oil exporting countries or big oil import countries try to do away USD in trading oil will kena sabotage with all cost.
US & UK are wrestling with Russia & China now as they are wanting to trade oil with other major currency. Iran find it as an opportunity to rise up against the US as they get support from the major oil import countries.
back then US was like superpower backed by NATO. china/russia/india was still in recovering phase. now for US to try pull a iraq/libya event again is hard. can say russia path a way for other countries to move away from petrodollar, while china and india testing waters :)
sharp drop in price of HY is an act of ib to get weak retail traders to sell their shares out of fear and margin traders so they can accumulate. to them, why buy high when you can manipulate the market and weak retail traders to get cheaper price?
when oil price down, worry about inventory loss. when oil price up, worry about high operation cost. crack spread up, hedging loss, crack spread down, business loss No matter how you think. HY made huge profit in this quarter as they earn big in inventory gains and advantage of crack spread.
All the crack spread data are subjecting to hedging which resulting in huge loss of HY! We witnessed it few times in the past QR! Read this x1000000000000000000000000000000000000000000 before you click the buy button!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
subwayzzz
1,062 posts
Posted by subwayzzz > 2022-03-15 15:42 | Report Abuse
nothing to see here.
sleep now and come back again 2 months later when Q1 2022 report is out.