FreeXOM6 min read
Diesel cracks are telling a different story
XOM
Delayed
OXY
Delayed
The thesis
Crude is pricing a demand scare while diesel inventories sit well below the five-year band. One of those two markets is wrong and it usually isn't the physical one.
What I'm watching
- Distillate days-of-cover
- Refinery utilisation into maintenance season
- Whether OPEC compliance actually holds
Positioning
Long, 4-10 weeks. Conviction: Medium. Energy is a macro-beta trade in disguise. Size for the correlation.
Opinion, not investment advice. The author may or may not hold positions discussed.
Opinion. The author may or may not hold positions discussed. Not advice. Not a financial promotion approved under FSMA s.21. Quote data is delayed. Past performance is not a reliable indicator of future results.
Comments
10 commentsThe setup makes sense. The horizon feels optimistic to me.
Good question. I'd size it at a third until it confirms.
Good timing — was just reworking my XOM sizing this morning.
The footnote disclosure in the last filing supports this read, for what it's worth.
Agreed — and the same thing showed up last cycle.
I'd push back slightly: the base rate on that is worse than it feels.
Saved. The watch-list section alone is worth it.
Good point — hadn't looked at it that way.
This lines up with what I'm seeing in the XOM tape.
Counterpoint: positioning is already crowded on this. The edge is thinner than it looks.