I was Right! ( Archived) (25)

This is from the Valero stock message board. You may not understand all the terms but I think you will get the idea. I will follow up with a few definitions.

OILS LAST HURRAH - READ & REJOICE! 7-Jun-08 11:43 am

Mark this down. Oil will now retreat back to $100 in good order. This was a final spike that was unwarranted, but predicted by a few who follow these things. I didn't believe it would happen like this, but a few predicted a last-ditch SPIKE to $140 and then BOOM, the bottom will fall out. OIL futures are WAY out of wack and just watch when the WEDNESDAY oil report comes out, the numbers are going to be SO HIGH for crude inventories (and gas unfortunately) that you'll see a $12 drop on Wednesday. By next Friday OIL will be $118 and dropping.

So if that pans out what to do as a refinery guy? Well the market ain't gonna believe it until the following week's inventory report. DO NOT buy refineries until they hit their NEW LOWS which should be within 2 weeks. The unwarranted spike to $140 guaranteed that scenario.

When the refineries hit their new lows (they will all hit their lows and stay there for but 1 market closing) that is when you LOAD up to the HILT because CRACK SPREADS are going to be huge by then and there will be a few surprise earnings reports come July.

VLO WILL hit $55 in July. It may flirt with $60. After that, who knows, ride this like a daytrade stock that it has become.

CRACK SPREAD:
In the oil industry and futures trading, the crack spread is the differential between the price of crude oil and petroleum products extracted from it; in other words, it is the profit margin that an oil refinery can expect to make by extracting other products from oil.

DAYTRADE:
A daytrade is where a person buys and sells a security within a 1 day period. This scheme works where the price of a stock is very volitile ie the price changes a large amount making it possible to make money in a very short time frame.