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Hi everyone,

Western Refining got a nice boost to its stock price today after Deutsche Bank upgraded shares from hold to buy. http://www.forbes.com/2011/06/22/analyst-moves-ccl-wnr-marke... In particular, it called out a widening gap between the Brent and WTI crude pricing. Because Western Refining buys WTI and not Brent, it's getting a cheaper price on its crude oil inputs, which leads to a higher gross margin.

I'm in the middle of putting together an article that describes this in more detail and what might be causing this difference, which I expect will be published sometime next week.

Cheers,
Jim
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No. of Recommendations: 1
Looks like someone is pinching your ideas :)

Fletch
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Ha! I only wish. :-)

Actually, management spent a bit of time in the last call discussing the Brent-WTI spread and pointing out that because they buy the cheaper WTI oil, they get to benefit from this diverging price. If I remember correctly, the reason for that is because they sell the refined products on the coasts (which are exposed to the Brent oil price), as well as inland, but are not subject to the high Brent prices that the coasts see (and they're including the Gulf coast, here).

Cheers,
Jim
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