RE:RE:RE:RE:RE:RE:RE:Pretty Great Day....Kavern's RecapKavern, even if the differential was to widen to $20 U.S., all these companies would still be minting cash while none of them is priced for such differential right now, more like $30 or even more while we are at sub $10.
Q1 funds flow and free cash flow will be phenomenal, analysts will upgrade and adjust their numbers, balance sheet will be improved. Then the summer season will kick into high gear and OPEC+ will see what the U.S. does with Iranian waivers and if status quo is maintained, expect them to keep cuts mostly in place at their June meeting.
The need for pure heavy at the refineries in Houston is there and will stay now for quite a while. They can't get it from Venezuela, Mexico is in severe decline and OPEC+ do not ship that heavy.
They don't want the diluted stuff going into pipelines because they already don't know what to do with all that extra light and really condensate/NGL from the Permian and Eagle Ford next door.
The mid-western refineries are stuck with the same issue and are also demanding the Canadian heavy stuff.
I think that is the only explanation that makes sense to explain the pricing that we are seeing for WCS.
Now, is it intelligent to prepare for down days? Absolutely and I took some profit this morning in names that had appreciated more quickly than others or were more accurately valued.