I agree. There are just too many headwinds right now.

one more thing... supply and demand.. I still believe most of what I learned
in Econ 101... sure there are short term bubbles, but they are self correcting,
every bbl of crude oil coming out of the ground (produced) is burnt somewhere,
(unless it is spilled, or someone like the US govt buys it and puts it in a
cavern and burns it later).

I should have added heating oil as another refined product below. Crack spread
is the difference between price of crude and refined products. It's a measure
of the refiners profit (although I contend there are other cost drivers which
distinguish various refiners) and the spread should correlate with a refiner's
share price, no? So if world crude oil demand or at least crude oil price is
increasing and US market demand for products (gasoline, etc) is flat or
decreasing (recession) then US crack spread is under pressure, and refiners are
bad bet. I agree go with the producers, or integrated oils and not the
refiners.

And how do you know the Crack Spreads are not getting better for awhile...the
futures...

Despite the hilarious attempts explaining prices based on real supply/demand
below, basically it's sucide to look at the refiners because of the incredible
momentum bubble in oil.

Either be nimble and ride the wave on the oil producers themselves or get out of
the way. Crack spreads are not increasing anytime soon.

Actually there is only One reason...Backwardation....if there is Contango you
buy the Refiners and oil shippers...if it is the other way around you have to be
careful of both...per the FRO conf call about two qtrs ago...you find the
coolest stuff in conf calls. Nymph

My friends think I'm crazy, but I tell them the only way we get lower oil is by
the price going higher. This is the only way we'll change our habits. We still
pay cheaper fuel than other countries. Europe pay more for petro/benzine per
gallon than we don in USA.

I changed my habits in the way I drive. I'm on nuetrual on all downgrades. I'm
using more brake than down shifting. I drive stick & love it over autotrans any
day. Lower the RPM's you run the less fuel you use. I have a 6 spd & run the
gear box to get low RPM on a high gear. Always
nuetral on stop lights. Regular maintence is always 1st on my list to my ride.


We need to change our consumption habits.

Transportation fuels are pretty much where most of the oil goes. Some goes into
petrochemicals too, plastics, etc.

I tried to list the pros and cons of an investment, got this far and gave up on
these guys. But my thesis could be wrong; any catalysts or factors I am
missing? US refiners do not export much (any) to Chindia...

I like how you talk about demand for the refined products is slowing which maybe
true but you don't say anything about the demand for oil slowing?

What else can you use oil for besides refined products?

Alot of your points indicate that we will slow down and demand will be reduced.
If this is the case. Wouldn't that bring more fuel to the story that gas prices
will go down. If they do then refiners might be a good pick @ a discount.

I only see short term downside. I think we'll march back up and probably touch
150. I think we have to revisit the refiners if we go higher due to it turning
to a value play and need to keep them in our radar.