Top 5 Gas Stocks To Watch Right Now

Top 5 Gas Stocks To Watch Right Now: Alon USA Partners LP (ALDW)

Alon USA Partners, LP (Alon USA), incorporated on August 17, 2012, owns and operates refining and petroleum products marketing business. Its integrated downstream business operates primarily in the South Central and Southwestern regions of the United States. It owns and operates a crude oil refinery in Big Spring, Texas with total throughput capacity of approximately 70,000 barrels per day (bpd). The crude oil pipelines the Company utilizes consist of the Amdel, White Oil, Mesa Interconnect, Centurion and Centurion Interconnect. Its Big Spring refinery produces ultra-low sulfur gasoline, ultra-low sulfur diesel, jet fuel, petrochemicals, petrochemical feedstocks, asphalt and other petroleum products.

During the year ended December 31, 2011 and the six months ended June 30, 2012, sour crude, such as West Texas Sour (WTS), represented approximately 80.4% and 80.4% of its throughput, respectively, and sweet crude, such as West Texas Intermediate (WTI), represente d approximately 15.8% and 17.1% of its throughput, respectively. For the year ended December 31, 2011 and the six months ended June 30, 2012, the Company produced approximately 49.1% and 49.2% gasoline, 32.3% and 32.5% diesel/jet fuel, 7.1% and 6.4% asphalt, 6.0% and 6.0% petrochemicals and 5.5% and 5.9% other refined products, in each case, respectively. The Company distributes fuel products through a product pipeline and terminal network of seven pipelines totaling approximately 840 miles and six terminals that it owns or access.

The Company competes with Chevron, ExxonMobil and Shell.

Advisors' Opinion:

• [By Ben Levisohn]

  How bad has this week been? Marathon Petroleum has fallen 4.3% through yesterday’s close, while HollyFrontier has dropped 2.5%, Valero Energy (VLO) has declined 3.5% and Alon USA Partners (ALDW) has slippe! d 5.7%. Western Refining (WNR) has weathered the selling and has ticked down just 0.3%.

• [By Robert Rapier]

  I warned last week that refiners would report relatively poor earnings for Q3, and refinery MLPs could take a hit, presenting a buying opportunity. On Nov. 6 Alon USA Partners (NYSE: ALDW) reported a loss for the third quarter of $16.1 million, or ($0.26) per unit, compared with net income of $120.4 million for the same period last year. Paul Eisman, CEO and president, cited the deteriorating margins that I discussed in last week’s issue: “Our third quarter results were impacted by a volatile and deteriorating margin environment resulting primarily from decreasing discounts for West Texas crude oil.”

• [By Robert Rapier] In last week’s issue I discussed the basics of the refining sector. Today I will provide an overview of four MLPs that hold refining assets.
  
  To review, the refining sector was very profitable in 2012 thanks to unusually high crack spreads, which for many US refiners are approximated by the price differential between Brent and West Texas Intermediate (WTI) crude oils. For a more thorough explanation of this phenomenon, please refer to last week’s issue.
  
  After years of trading at a $1 to $3 per barrel discount to WTI, Brent began fetching a premium a few years ago as a glut of crude developed in the mid-continent area of the US. In 2011 the Brent-WTI price differential increased to more than $25/bbl, and it remained historically high in 2012.
  
  But pipeline capacity started to catch up this year, and the share prices of refiners retreated as the glut began to dissipate and the Brent-WTI differential shrank. In Q3 2012, the Brent-WTI differential a veraged $17.43/bbl, but by Q3 of this year, the differential had fallen to $4.43/bbl. This promises bad news for refiners about to report Q3 earnings.
  
  Many analysts downgraded the refining sector in Q3, but as the differential fell below $5! /bbl it w! as hard to imagine that the news could get much worse. With poor Q3 results largely priced in, the differential subsequently rose back above $10/bbl, signaling better refining margins moving into Q4.
  
  Refiners began to post earnings this past week, and as expected they were weak. Valero (NYSE: VLO) reported slightly higher revenues year-over-year, but net earnings fell more than 50 percent from a year ago. Nevertheless, they beat the extremely pessimistic expectations of analysts, and Valero shares rose on the news.
  
  Phillips 66’s (NYSE: PSX) refining unit actually posted a loss, but its chemical business turned in a solid quarter which more than compensated for the disappointing refining results.
  
  T he rest of the refine
• [By Rick Munarriz]

  Wednesday
  Alon Partners USA (NYSE: ALDW  ) reports on Wednesday. Analysts see the oil refiner earning $1.36 per unit on Wednesday, and that's welcome news for investors. Alon Partners is set up as a limited partnership, passing on most of the money it makes to its stakeholders.

source from Top Stocks For 2015:http://www.topstocksblog.com/top-5-gas-stocks-to-watch-right-now-2.html