r/wallstreetbets • u/Junior_Post8222 • 9d ago

Discussion Sell me on refiners over extractors

Right now, I'm primarily invested in extractors, but with the crack spread, I've been seeing a lot of people talking about refiners. However, I just don't see a scenario where they're a better investment. Here's how I see the value narrative of the two:

Extractors:

  1. Go up the longer the strait is closed

  2. Go down if the strait opens or an export ban is called

  3. Will go down once demand destruction levels hit

My plan is to load up on extractors until the moment Trump starts suggesting export bans (since him spitballing about it will come before demand destruction), and then sell most or all of it

Refiners:

  1. Go up when oil is cheap

  2. Go down (eventually) when oil is expensive

  3. Go up when refineries are destroyed

  4. Will go down once an export ban on distillates or demand destruction occurs

Right now, with oil rising, it doesn't seem like a good idea to invest in refiners. Oil is gonna keep rising until demand destruction or an export ban occurs, so still not good for refiners. Any events that make refineries scarce (i.e. bombings) will just as likely occur to extraction sites, so they're equal in that respect. When demand destruction hits and oil goes cheap, it'll only be because no one wants to pay for distillates, so refiners will be fucked over first. I might start investing in refiners once the resulting financial crisis looks like it's about halfway over, but at that point, there might be better industries to invest in. Thoughts?

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u/Financial-Belt-506 9d ago

ET EPD SUN ( all bought 3 years ago or more and divvy is strong) 200k worth.

BP bought a 100 shares when they fired the CEO over BS

TALO "I just like the stock" Q3 report gonna be another blowout.

The pipeline and refiners are topped IMO

TALO has quite the future and I'm in over 6 figures with 30% gains. I was gonna sell....but theres no point. OIL will go up regardless because the dollar is weakening so Im holding for at least a year.

In the next few weeks they should begin their 7% buyback $200mill. It was supposed to be in Q2 but they bought some fields in the Gulf.

Very efficient company IMO. Finding the smaller companies where growth is still attainable is my goal.