Money is rotating from big refiners and integrated oil companies into oil drilling and servicing firms. The move could be in its early innings, and the recent drilling gains alongside refiner losses are working in that direction. x.com 

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 

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 

Valero looks expensive against its earnings, trading at 17x, or 10x next year's, versus the usual 9x for oil and gas producers. At 9x mid-cycle EPS of $22.12, give or take 12%, fair value is $177.34-$225.71, so the $406.30 price is 80% above fair, though trailing and forward reads differ by 63%. This is a valuation read off reported earnings and estimates only, with no fundamental work. x.com 

Refiners Marathon Petroleum, Valero and Phillips 66 are back at the top of S&P 500 momentum rankings as earnings surge. The three earned a combined $12.6 billion in Q2, the most since Russia invaded Ukraine in 2022, with Marathon and Valero scoring 100 on momentum and Phillips 66 scoring 99. x.com 

Marathon Petroleum looks expensive against its earnings. It trades at 15x trailing earnings when oil and gas producers usually get 10x, putting fair value at $239.59-$304.93 on 10x mid-cycle EPS of $28.21, give or take 12%. Trailing and forward earnings differ by 69%, and $259.65 marks a pullback level. This is a levels-only read off reported earnings and estimates, with no fundamental work. 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 

US energy stocks such as Valero are resuming their uptrend after a brief ceasefire correction because the US is draining reserves at an incredibly fast pace to keep oil and gasoline flowing and stop prices from spiraling. x.com 

US crude and Chevron face a potential domestic glut: supertanker export costs are said to have risen from $8 million to $80 million, pushing Asian and European buyers toward Saudi and South American oil. Limited US refining capacity could leave the surplus unused and bankrupt smaller producers, though the author still says earlier exports caused a shortage. x.com  x.com  x.com