Shell's stronger refining profits and larger buyback support the view that its breakout holds. Q3 adjusted earnings reached $10.8 billion versus $9.9 billion expected, as refining margins hit a record $42 a barrel; the three-month buyback rises from $3 billion to $5 billion. Those margins will not last forever. x.com 

Delek US Holdings looks cheap against its earnings. The integrated downstream energy company trades at 20x trailing earnings but 9x next year's, while oil and gas producers usually get 14x. Applying 14x to next year's estimated $8.26 a share, give or take 12%, gives fair value of $101.73-129.47, with the stock 27% below the bottom of that range. The read leans on forecasts, with forward earnings 125% above trailing, and is based on valuation levels only, with no fundamental work. x.com 

Refiners such as Valero and Marathon Petroleum may be nearing a top, because the cure for high prices is always high prices. The stocks have made monster moves as crack spreads blow out and foreign buyers fight for distillate capacity. x.com 

Oil refiners have become the bottleneck, with refining, not crude, now setting fuel prices. Per @JeffSnider_EDU, crude inventories are only 6% below normal, but gasoline stocks just fell 5 million barrels in a week and diesel is 12% below average despite soft freight and US gasoline demand down 2.2%. Refineries running at 95.8% still can't keep up, pushing the crack spread to record highs. x.com 

Oil refiners such as Marathon Petroleum and Valero stand to benefit as renewed Ukrainian drone strikes on Russian refineries look bullish for crack spreads. A drone reportedly hit Kirishi's KINEF refinery again just as it was preparing to restart after months of repairs. KINEF is one of Russia's largest refineries, processing about 20 million tons of oil a year, roughly 6.6% of the country's refining capacity. x.com 

Valero faces structural obsolescence as battery and solar costs fall and transportation shifts from diesel to EVs, a risk the market misses by overweighting the news and the present. Its stock swung from $120 in 2018 to $40 in 2020 to $422 now. Valero and solar maker LONGi sit at opposite ends of who will power future transportation, with opposite present circumstances and opposite structural paths given the evolution of costs. x.com  x.com 

Oil refiners look too late to chase because they are over-earning, and margins will likely compress down the line. Refiners ran as Chinese utilization fell about 40% and 40% of Russian capacity went offline because of the war, pushing product-versus-crude margins to all-time highs of $80-100. Oil services names such as SLB look better placed to benefit. x.com 

European refiners Repsol and OMV offer better risk/reward and could rally sharply if the US imposes export curbs. x.com 

Refiners such as Valero and PBF look past their best, because higher oil prices are no longer necessarily bullish for them. Per a client, refiners are running at 95% and still can't build finished-product inventories. These look like as-good-as-it-gets earnings, and prices look ahead to demand deconstruction: high prices force alternatives and faster cost-cutting. Capacity scarcity still supports valuations, as with AI stocks, but price controls always backfire. x.com  x.com  x.com 

Exxon's stock is pricing the screen, not its sworn 8-K disclosure that Q2 earnings will be about $5 billion above Q1. The July 7 filing attributes $3.5-3.9 billion to higher crude and $3.3-4.1 billion to refining and chemicals, less about $1 billion of war disruption. Yet Exxon closed at $145.09, ten dollars below its war peak. x.com  x.com