Oil refiner and marketer Western Refining Inc. (WNR) reported weaker-than-expected third quarter results, pulled down by lower margins and throughput on the back of weak fuel demand and high inventories caused by the prolonged economic slowdown. This was partially offset by lower costs and expenses. Its loss per share came in at 5 cents, wider than the Zacks Consensus Estimate of 3 cents. In the year-ago period, the Texas-based company earned $1.60 per share. Revenues were down 40.1% year over year to $1.9 billion. Western follows larger rivals Valero Energy Corp. (VLO) and Sunoco Inc. (SUN) that also posted bigger-than-expected losses. Refining Segment Results Western’s refining segment experienced a significant decline in operating income (operating income of $22.2 million vs. $180.8 million in the year-earlier quarter), adversely impacted by weak values for finished products, relative to crude and other feedstock prices. Throughput...

Oil refiner and marketer Sunoco Inc. (SUN) reported weaker-than-expected third quarter results as its refining and chemicals operations slipped in the red, pulled down by reduced margins and production. Loss per share, excluding special items, came in at 29 cents, significantly wider than the Zacks Consensus Estimate of 9 cents. In the year-ago period, the Pennsylvania-based company earned $4.78 per share. Revenues were down 42.6% year over year to $8.7 billion.   Refining & Supply   The Refining & Supply segment lost $118 million during the quarter, as against a profit of $398 million in the year-earlier period, mainly on account of lower realized margins and lower production volumes, partly canceled by lower expenses. Realized margin averaged $2.72 per barrel, down 81.7% from the third quarter of 2008, reflecting a very weak East Coast refining margin environment. Total production was down approximately 17.2% year over year to 669.2 ...

Yesterday, oil refiner and marketer Sunoco Inc. (SUN) announced certain strategic actions to improve the company’s performance and competitiveness in a cost-effective manner, as it struggles to cope with the bearish refining margin environment. Sunoco said that it would indefinitely idle a New Jersey refinery, furlough 400 workers and cut its dividend in half. The company hopes that these measures will save $320 million annually, though this would also lead to $475–$550 million in largely non-cash financial charges over the next few quarters. Sunoco has decided to shut down its 145,000 barrels-per-day Eagle Point refinery in Westville, NJ, until market conditions improve. In the meantime, the company will shift production from Eagle Point to its refineries in Philadelphia and Marcus Hook, PA, and may use the idled refinery to produce alternative fuels. The Philadelphia and Marcus Hook facilities will up their utilization rates to make up ...

Late last week, Sunoco Logistics Partners LP (SXL) reported that it has closed the acquisition of Excel Pipeline LLC, which owns the 52-mile Excel crude oil pipeline running from Duncan to a refinery in Wynnewood, both in Oklahoma. Sunoco Logistics purchased Excel from affiliates of Gary-Williams Energy Corp., which runs the Wynnewood refinery.  Sunoco Logistics has operated the Excel pipeline on behalf of Gary-Williams since 2007. As part of the transaction, Gary-Williams has entered into a 20-year throughput agreement to use the pipeline's capacity.  Sunoco Logistics did not disclose the value of the Excel deal but expects the transaction to be immediately accretive and to add value to the partnership's business, while extending its long-term relationship with Gary-Williams.   Philadelphia-based Sunoco Logistics Partners L.P. is a master limited partnership (MLP) that acquires, owns, and operates a geographically diverse portfolio of refined product and crude oil pipelines ...

Venezuelan President Hugo Chávez is known for his erratic behavior, but his latest move to extend official recognition to Georgia's separatist regions of South Ossetia and Abkhazia during his visit to Moscow is a bit of a head-scratcher.  In theory, it shouldn't come as a surprise, as probably the strongest predictor of Chávez's future behavior is anything perceived to be contrary to U.S. interests.  That includes sometimes illogical policies and relationships, such as red carpet welcomes for Sudan's Omar al-Bashir, cooperation with Iran on missile and nuclear technology, hugs for Alexander Lukashenko of Belarus, and tea parties with Coronel Muammar Qaddafi. 

What is strange is that Chávez waited a whole year before joining up with his surrogate state

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Yesterday, oil refiner and marketer Sunoco Inc. (SUN) announced the sale of certain assets of its U.S. retail heating oil and propane distribution business to specialty chemicals supplier Superior Plus Corp. Canada-based Superior has agreed to pay $82.5 million in cash for the transaction, which is expected to close on September 30, subject to regulatory and other approvals. The business to be sold – Sunoco Retail Heat – supplies a wide variety of liquid fuels and propane gas to Pennsylvania and New York markets. The segment also has a network of two pipeline-supplied fuel terminals and 22 retail bulk plants that provide up to 20 million gallons of storage capacity in its core markets. Based upon 2008 volumes, Sunoco Retail Heat’s fuel distribution mix consists of about 81% distillates (mainly heating oil and diesel fuel), 15% gasoline, and 4% propane, while the customer base is comprised ...

The largest oil refiner in the U.S., Valero Energy Corporation (VLO), is deferring its search for overseas acquisitions following the decline of an acquisition stake in a Netherlands refinery.   The company had sought acquisition of Dow Chemical’s (DOW) 45% interest in the TRN refinery for an enterprise value of approximately $725 million. But the refinery’s major stake holder, Total SA (TOT), turned down Valero’s offer by exercising its right of first refusal. Valero wanted to confine the European diesel market by capturing this acquisition opportunity. On the other hand, yesterday, the company closed one of its refineries in San Nicolas, Aruba, indefinitely. Despite the refinery’s capability of processing low-cost heavy sour crude oil, it was suffering from low product margins. These factors point to our weak outlook for near-term refinery margins and a growing list of medium- to long-term challenges. Weak refined product ...

Deputy Prime Minister Igor Sechin has said there is no immediate necessity for Russia to extend a loan to Ukraine to ensure its buying of natural gas.  In a highly critical open letter to Ukrainian President Viktor Yushchenko, Dmitry Medvedev has accused Ukraine of endangering gas supplies to Europe and destabilizing relations with Russia: 'we have an impression that Kiev consistently seeks to break traditional economic ties with Russia, firstly in the energy sector'.  Hungary's largest oil refiner Mol will set up a joint venture with Gazprom this year to build a natural-gas storage facility in Hungary, in which both companies will have equal stakes.  The Times reports that Al Gore and Mikhail Gorbachev are reportedly in direct competition over who will control the new 'green' internet domain .eco. Former Us Vice President Gore has pledged his support ...

Above is a graph of various commodity ETFs. The main ticker is UNG (United States Natural Gas Fund), a ETF which tracks prices of natural gas delivered at Henry Hub. OIL is the iPath Oil ETN. JJA is the iPath Agricultural Commodities ETN.  JJM is the iPath Industrial Metals ETN. And, JJP is the iPath Precious Metals ETN. The chart displays the year-to-date performance of these various commodity indexes and it’s plainly obvious that one stands out among the others. Generally speaking, non-energy commodities have been on an upward trend since the beginning of the year and in fact would have provided mid-to-high teens returns just in the last few months! Even oil, though down precipitously in the first

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Western Refining Inc. (...