This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

[video] Dicker: Buy Refiners After Report

NEW YORK ( TheStreet) -- I was talking to Jim Cramer today about the refiners, which have seemed to catch a bid in the last week and a half after having a miserable quarter.

Several factors seem to be turning in the refiners favor, and there may be an opportunity to buy them after they report later this month.

First, there is a rumor the Environmental Protection Agency will drop the volume requirements for ethanol blending into gasoline below the blend wall for 2014 -- a boon for the refiners if it is true. President Obama wants to take the Renewable Fuel Standard (RFS) away as a political issue through the midterm elections of 2014 and dropping the required ethanol volume that refiners must use from 15 billion gallons to nearly 12 billion gallons for 2014 will help do that.

Equally important, there's been a widening of the Brent/West Texas Intermediate spread, which can be seen as a proxy for the margins and therefore the profits of the refiners. While the positive help of this spread won't be felt until at least the fourth quarter of 2013 and the first quarter of 2014, the prospect of this return to solid margins has helped fuel the refiners recently.

But there's been clear indication that most of the refiners have endured a very bad third quarter and their results, due to come out at the end of this month and through the first week of November, are likely to be miserable.

There, I think, is the opportunity. A bad quarterly report will help to depress shares of refiners including Valero (VLO), Western Refining (WNR), CVR Energy (CVI), Phillips (PSX) and others. But buying these depressed shares will yield great returns as the positives of the wider refining margins and lowered RFS mandates are felt through the rest of 2013 and into 2014.

I talk more about the coming refining opportunity with Jim in the video above.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

 

Dan is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons.

 

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on CNBC, Bloomberg US and UK and CNNfn.

 

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,155.34 +23.37 0.14%
S&P 500 2,002.95 +3.97 0.20%
NASDAQ 4,557.4070 +4.6480 0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs