Table of Contents
This is about the point in those old movies where the captain of the sinking ship lowers the lifeboats and says women and children first. The men, brave or not, get to stay behind and try to keep the ship from sinking or at least drown while secure in the knowledge their wife and kids were safe.
I have a different view this week. There has got to be a bottom somewhere close because we have been stopped out of 12 positions in the last two weeks. We only have seven left and the biggest rebound of the year will occur as soon as we go flat and step aside to watch. It always happens that way. After getting a bloody nose two weeks in a row the average investor recoils to the shadows to lick his wounds only to see monster rebounds while he is out of the market.
However, I do not want to be that investor that looks back several years from now and tells his grandkids that "I driven out of the energy market in the crash of 2008. That was the biggest drop in oil prices in history! Yes siree Bob, that one busted me and the next year oil went to $300 a barrel!"
Emotionally I want to buy because nothing goes straight down and $147 to $123 is pretty dang straight. With $122 strong support this would be the perfect place for a rebound. With storms heading for the Gulf, violence spiking in Nigeria, production falling in Russia and Mexico and a failed attempt to pass a law against speculation this "should" be a great place for a rebound. Should and could always get me in trouble. Whether I "should" have waited or I "should" have jumped in, there is always risk. On one side there is the risk of lost capital if you jump in. On the other there is the risk of lost opportunity if you stay out. Given the choice in hindsight we would always choose lost opportunity over lost capital.
For that reason I am going to be sparing on adding any more current plays this weekend but I am going to add a lot to the watch list. The current levels on many of these energy stocks are very compelling and we will be kicking ourselves if we pass up any future dips. The commodity markets are going down in flames and they don't appear to be linked to any common cause. The fertilizer companies are dropping like somebody found a miracle nutrient that doubled production overnight without potash. In reality every company repeats almost weekly that demand is much higher than supply. Products are being rationed and prices are rising monthly. That appears to be lost on investors with POT down $30 in two weeks and Mosaic down $24.
With the markets in a state of disarray and the two worst months of the year August and September maybe it is time to pull in our horns and be timid in our entries. Of course that would be a sure sign of capitulation and that is something you want to watch others do for a sign to jump in.
There is no easy answer. Nothing has changed fundamentally other than $4 gasoline has knocked off about one million barrels per day of demand. That still puts us on track to need another 600,000 bpd or so in 2008 and another 1.5 mbpd in 2009.
Trading is cyclical and this cycle may have run its course. Next week will be the key. There are no expirations and oil closed right at support on Friday. If it breaks here the next stop could be $110 and I would rather not ride longs to that level. I am going to keep the stops tight but try to keep at least a few positions open to catch a rebound when it occurs.
I am not going to spend a lot of time in each play description explaining why we got stopped out. Repeat after me, "It was the largest dollar drop in the history of the oil market." The 12th largest energy-trading firm in the nation with professional traders and billions in capital failed last week with a $3.2 billion loss on their positions. That does not make our loss any less painful but we are in good company.
You have made the point several times that the problem with the oil crunch is a transportation issue. It is not a power grid issue (coal, nat gas and nuclear). I invest in nat gas stocks and continually come across the upbeat phrase that oil trades at 13:1 to nat gas and it has only been 6:1 historically. Therefore, nat gas will soon double in price. Am I correct to be scratching my head? Oil is principally international (therefore risky), is running out and its use in transportation cannot be substituted today. Nat gas is a power grid driver and there have been some recent large finds giving hope to the future. It faces a different, but tight, demand curve. Heating days, cooling days, hurricanes, Google server farms and political backlash against coal and nuclear drive nat gas I would think.
What am I missing?
I am not sure you are missing anything. These two fuels get intermixed daily by the media but as you pointed out they are not the same. Boone Pickens is trying to get the U.S. to convert to nat gas for transportation but that is not the answer. Nat gas fueled vehicles typically get only 200 miles per tank and nat gas is not really that less expensive (today). The relationship between oil and gas pricing is going to diverge further as oil becomes harder to get. However, nat gas production peaked in North America in 2004 so that fuel is eventually going much higher as well.
The problem with gas is the huge demand for a power generation fuel. More plants are under construction in North America and yet our supplies are already declining. LNG was supposed to be the answer four years ago when middle east gas and gas from Russia was $1 per MCF. Now that gas is going to Europe, Asia and India where they are willing to pay more than the U.S. is paying. It is only going to get worse. There is plenty of gas in the world but transporting it to the place of use is a challenge. It can be consumed much faster than it can be transported. The demand for clean fuel is overpowering the nat gas system.
You are right that nat gas will double but not because it is tied historically to 6:1 oil. It is going to double because we are already running out of it in North America. Estimates I have heard among the gas producers are $20 mcf in 2010 and $25 by 2012. The problem is simply rapidly expanding demand, as in new gas fired electricity plants, new manufacturing plants, new homes and now new vehicles. Supply is declining despite the drilling in places like the Barnett Shale, Jonah Field, Haynesville Shale. These gas wells come on very strong the first year then drop off sharply, some as much as 85% for the duration of the well. In order to keep production high they have to keep punching new wells as fast as possible to get than initial first year pop. Unfortunately they can't continue to drill faster and faster simply because there are not enough deposits or rigs. We are drilling three times as many gas wells per year today as we were 10 years ago but production is declining.
Yes, gas is going to double.
(I am going to try and make this a weekly feature. Send me your email questions and I will try to answer. Jim @ OptionInvestor.com)
August Natural Gas Futures Chart - Daily
August Gasoline Futures Chart - RBOB Daily
Changes in Portfolio
Portfolio Listing & Top Picks
If you are looking to add another position these are my top picks for this week. The target prices listed would be the ideal entry points for these stocks today. There is no assurance any stock will ever return to these support levels and you will need to make your own decision about an entry point above these levels. I believe these stocks have the best potential this week. The list will change from week to week based on technicals, fundamentals, crude prices and market action. The list is not sorted in any particular order.
Most Recent Plays
CHK $48.29 -$6.04 - Chesapeake Energy
CHK was stopped out as a play the prior week and we reentered it on Tuesday when it hit our trigger at $51.
The CEO stepped up to the plate on July 16th and bought another 750,000 shares at $57.
Earnings July 31st
Chesapeake Energy Corporation is a producer of natural gas in the United States (first among independents). It owns interests in approximately 38,500 producing oil and natural gas wells that are producing approximately 2.2 billion cubic feet equivalent (bcfe), per day, 92% of which is natural gas. Its operations are located in the Mid-Continent region, which includes Oklahoma, Arkansas, southwestern Kansas and the Texas Panhandle; the Forth Worth Basin in north-central Texas; the Appalachian Basin, principally in West Virginia, eastern Kentucky, eastern Ohio and southern New York; the Permian and Delaware Basins of West Texas and eastern New Mexico; the Ark-La-Tex area of East Texas and northern Louisiana, and the South Texas and Texas Gulf Coast regions. In July 2007, the Company announced the acquisition of Kerr-McGee Tower from Anadarko Petroleum Corporation and subsequent sale of the tower to SandRidge Energy, Inc.
Breakdown trigger: $51 hit 7/22
Position: 2010 $60 LEAP Call WZY-AL @ $8.90
BTU $66.44 +2.34 - Peabody Energy
Peabody reported earnings last week that more than doubled and they had nothing but good things to say in their guidance. They increased the dividend by 6 cents. On Friday Arch Coal and Bucyrus also blew the doors off the earning express. Coal stocks will follow natural gas prices so a continued drop in nat gas could produce weakness in the coal sector.
Earnings July 23rd, more than doubled Q2-2007.
Peabody Energy Corporation (Peabody) is a coal company. During the year ended December 31, 2007, the Company sold 237.8 million tons of coal. It sells coal to over 340 electricity generating and industrial plants in 19 countries. At December 31, 2007, the Company had 9.3 billion tons of proven and probable coal reserves. The Company owns majority interests in 31 coal operations located throughout all the United States coal producing regions and in Australia. In addition, it owns a minority interest in one Venezuelan mine, through a joint venture arrangement. Most of the production in the western United States is low-sulfur coal from the Powder River Basin. Peabody owns and operates six mines in Queensland, Australia, and five mines in New South Wales, Australia. During 2007, the Company generated 89% of its production from non-union mines. On October 31, 2007, Peabody spun-off portions of its Eastern United States Mining operations business segment to form Patriot Coal Corporation.
Breakout trigger: $68 hit 7/21
Position: 2010 $80 LEAP Call LLW-AP, $14.80
USO $99.27 -3.85 - US Oil Fund
The USO is definitely oversold and the 100-day average has been strong support since June-07. $99 is also strong support so I am looking for a rebound here.
United States Oil Fund, LP (USOF) is a commodity pool that issues limited partnership interests or units that may be purchased and sold on the American Stock Exchange (the AMEX). The Company invests in futures contracts for light, sweet crude oil and other types of crude oil, heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the New York Mercantile Exchange (NYMEX), International Currency Exchange (ICE) Futures or other United States and foreign exchanges (collectively, Oil Futures Contracts). It holds interests in other oil-related investments such as cash-settled options on Oil Futures Contracts, forward oil contracts, and oil-based over-the-counter transactions. As of December 31, 2007, USOF held 4,754 Oil Futures Contracts traded on the NYMEX and 300 Oil Futures Contracts traded on the ICE Futures. The Company operates under full management control of its sole General Partner, Victoria Bay Asset Management, LLC (the General Partner).
I am not using LEAPS because I view this as a short-term trade.
Breakdown trigger: $101, hit 7/23
Position: OCT $110 Call IYS-JF, $6.30
FWLT $55.72 -$2.22 - Foster Wheeler *** Stopped ***
New 4-month low as the sector imploded on the Thursday crash. No news.
Earnings are Aug-5th
Breakdown trigger: $60 hit 7/16
Position: 2010 $70 LEAP Call LWM-AN @ $12.80, exit 8.69 7/24
HP $57.94 -2.25 - Helmerich Payne *** Stopped ***
The Thursday crash hit our stop at $55 and took us out. I am still positive about HP and I think this is still a good place to buy but I am not reentering ahead of earnings next Thursday.
Earnings July 31st
Breakdown trigger: $62 hit 7/17
Position: 2010 $70 LEAP Call LQB-AN $11.40, exit 8.40 7/24
XLE $73.81 -$3.09 - Energy Select SPDR *** Stopped ***
This play was over before it started. The continued drop in oil crushed the sector despite anticipation for earnings next week.
The XLE is a group of 36 companies in the energy sector. Exxon is the largest component and Tesoro the smallest. See the complete list here.
Position: Dec $80 Call XTG-LB currently $6.10, exit $4.32, 7/24
SD $47.89 -3.69 - SandRidge Energy *** Stopped ***
A -33% correction in nat gas over the last three weeks was just too much for the gas stocks to handle.
New position: 7/20
MOS $122.05 -5.08 - Mosaic Industries
The decline rate slowed slightly and earnings are on Monday. We will either be a lot higher by Tuesday or stopped out at $112.
It was reported last Friday that the price of potash has risen +21% in recent weeks and the exporter for MOS, POT and AGU has told customers that all further sales in 2008 will be at the new price or higher. There is simply not enough product and too many people increasing their food consumption. As the world moves towards 7 billion people in 2012 this problem is only going to get worse. There were only 6 billion in 1999. Adding a billion mouths to feed every 12 years will require a lot more fertilizer.
Earnings July 28th
Breakdown trigger: $125 hit 7/08
Position: 2010 $160 LEAP Call KCA-AL @ $27.45
FLR $79.81 -4.44 - Fluor *** Stopped ***
Stopped out on Thursday with the market crash.
Earnings August 11th
Breakdown trigger: $175 hit 7/07 (2:1 Split = $87.50)
Position: 2010 $200 LEAP Call LLF-AZ @ $35
COP $81.98 -$1.93 - ConocoPhillips
COP earnings were stellar and analysts are now predicting they will earn $13 a share for all 2008. That is a whopping PE of 6. Yes, 6! They earned $5.44 billion for the quarter and all they get is a 6. Production volumes did decline slightly as a function of older fields going into decline and lost production due to extremely high prices triggering higher royalty payments. The higher the price of oil the more oil the host country gets to keep for themselves. COP should be rallying but instead it is hugging support at $80. Something needs to kick this sector off the sell button and back into buy mode.
Earnings July 23rd, $3.50 per share
Position: 2010 $90 LEAP YRO-AR @ $11.35
HK $33.63 -6.07 Petrohawk Energy *** Stopped ***
33% drop I nat gas crushed the gas stocks. I believe $30 is strong support but gas has to firm first.
Breakout trigger: $40.75 Hit 6/23
Position: DEC $50 Call HK-LJ @ $4.50, exit 3.20 7/23
ENER - $62.87 -4.15 Energy Conversion Devices
Definitely no complaints here. Trend is still up and ENER tried to resist the market drop.
Breakout trigger: $68.50 hit 6/16
Position: 2010 $80 LEAP Call KYU-AP @ 23.10
CRR $51.73 -1.11 - Carbo Ceramics
Very close to a stop but still holding in its recent range. No complaints!
Breakout trigger: $48 Hit 5/12
Position: Dec $50 Call CRR-LJ @ $5.80
Leaps Trader Watch List
I added a bunch of possible plays but I do not expect to get an entry on all of them. If we got good entries on only half over the next month I would be happy. There are some very compelling values being created by the drop in oil prices.
Current Watch List
XLE - Energy Select SPDR
The XLE is a group of 36 companies in the energy sector. Exxon is the largest component and Tesoro the smallest. See the complete list here.
Energy Select Sector SPDR Fund (the Fund) seeks to provide investment results that correspond to the price and yield performance of the Energy Select Sector of the S&P 500 Index (the Index). The Index includes companies that primarily develop and produce crude oil and natural gas, and provide drilling and other energy-related services. The Fund utilizes a passive or indexing investment approach to invest in a portfolio of stocks that seek to replicate the Index. The Funds investment advisor is SSgA Funds Management, Inc.
Breakdown trigger: $72.00
Buy Dec $80 Call XTG-LB
Breakout trigger: $78.00
Buy Dec $85 Call XTG-LG
HP - Helmerich & Payne
Helmerich & Payne, Inc. is primarily engaged in contract drilling of oil and gas wells for others. The contract drilling business accounts for almost all of the Company's operating revenues. It is also engaged in the ownership, development and operation of commercial real estate. It is organized into two separate operating entities: contract drilling and real estate. The Company's contract drilling business consists of three business segments: U.S. land drilling, offshore platform drilling and international drilling. The Company's U.S. land drilling is conducted primarily in Oklahoma, California, Texas, Wyoming, Colorado, Louisiana, Mississippi, Alabama, Arkansas, New Mexico, and North Dakota, and offshore from platforms in the Gulf of Mexico, California, Trinidad and Equatorial Guinea. During the fiscal year ended September 30, 2007, the Company's international land segment operated in seven international locations: Venezuela, Ecuador, Colombia, Argentina, Bolivia, Tunisia and Chile.
Breakout trigger: $64
Buy 2010 $70 LEAP Call LQB-AN
Breakdown trigger: $50
Buy 2010 $60 LEAP Call LQB-AL
FLS - Flowserve
Flowserve Corporation (Flowserve) is a manufacturer and aftermarket service provider of flow control systems. The Company develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications. Flowserve offers a range of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting. The Company sells its products and services to more than 10,000 companies, including engineering and construction firms, original equipment manufacturers (OEMs), distributors and end users. The Company operates through three business segments: Flowserve Pump Division (FPD) for engineered pumps, industrial pumps and related services; Flow Control Division (FCD) for engineered and industrial valves, control valves, actuators and controls and related services, and Flow Solutions Division (FSD) for precision mechanical seals and related products and services
Breakout trigger: $128
Buy JAN $140 Call FLS-AH
Breakdown trigger: $112
Buy JAN $130 Call FLS-AF
FWLT - Foster Wheeler
Foster Wheeler Limited operates through two business groups, the Global Engineering & Construction Group (Global E&C Group) and the Global Power Group. The Global E&C Group, which operates globally, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation and distribution facilities, and gasification facilities. The Global Power Group designs, manufactures and erects steam generating and auxiliary equipment for electric power generating stations and industrial facilities globally. In February 2008, the Company completed the acquisition of Biokinetics. On April 7, 2006, the Company completed the purchase of the remaining 51% interest in MF Power.
Breakdown trigger: $50
Buy 2010 $60 LEAP Call LWM-AL
Breakout trigger: $60
BUY 2010 $70 LEAP Call LWM-AN
FLR - Fluor
Fluor Corporation is a holding company that, through its subsidiaries, provides engineering, procurement and construction management (EPCM) and project management services. Fluor serves a number of industries worldwide, including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. Fluor is also a primary service provider to the United States Federal Government. It performs operations and maintenance activities for major industrial clients, and also operates and maintains their equipment fleet. The Company is aligned into five principal operating segments: Oil and Gas, Industrial and Infrastructure, Government, Global Services and Power. Fluor Constructors International, Inc., which is organized and operates separately from its business segments, provides unionized management, construction and management services in the United States and Canada, both independently and as a subcontractor on projects to its segments.
Breakdown trigger: $76
Buy 2010 $90 LEAP Call LLF-AR
Breakout trigger: $90
Buy 2010 $100 LEAP Call LLF-AT
RIG - Transocean
Transocean Inc. (Transocean) is an international provider of offshore contract drilling services for oil and gas wells. As of February 20, 2008, the Company owned, had partial ownership interests in or operated 139 mobile offshore drilling units. Its fleet included 39 high-specification floaters (ultra-deepwater, deepwater and harsh environment semisubmersibles, and drillships), 29 midwater floaters, 10 high-specification jackups, 57 standard jackups and four other rigs. As of February 20, 2008, the Company also has eight ultra-deepwater floaters contracted for or under construction. The Companys primary business is to contract these drilling rigs, related equipment and work crews primarily on a day rate basis to drill oil and gas wells. In November 2007, the Company completed its merger transaction with GlobalSantaFe Corporation (GlobalSantaFe).
Breakdown trigger: $130
Buy 2010 $150 LEAP Call YDR-AJ
Breakout trigger: $140
Buy 2010 $160 LEAP Call YDR-AL
PBR - Petrobras
Petroleo Brasileiro SA - Petrobras (Petrobras) is a Brazil-based holding company is engaged in the exploration, exploitation and production of oil from reservoir wells, shale and other rocks, and in the refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy related activities. Petrobras has 109 production platforms and 15 refineries. It operates 31,089 kilometers of pipelines. The Company has various subsidiaries: Petrobras Distribuidora SA - BR, which is involved in the distribution and commercialization of oil products and natural gas, and Petrobras Netherlands BV - PNBV, which is active in the purchase, sale and rent of equipment and platforms for the production of oil and gas. Petrobras operates in Brazil, Argentina, Mexico, Portugal, the United States, Peru and Turkey, among others.
Breakdown trigger: $50
Buy 2010 $60 LEAP Call YMO-AL
Breakout trigger: $62
Buy 2010 $70 LEAP Call YMO-AN
EWZ - Ishares Brazil
Despite the strong performance over the last several years the ETF has declined on profit taking, inflation and the drop in oil prices. Petrobras is a major component along with RIO, BBD, ITU and 66 other companies in Brazil. You hear a lot about the strong growth in the BRIC countries. That B stands for Brazil.
Breakdown trigger: $73
Buy 2010 $80 LEAP Call WKB-AP
Breakout trigger: $85
Buy 2010 $100 LEAP Call WKB-AT
RIMM - Research in Motion
Research In Motion Limited (RIM) is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, short message service (SMS) messaging, Internet and intranet-based applications. RIM technology also enables an array of third party developers and manufacturers to enhance their products and services with wireless connectivity to data. RIMs portfolio of products, services and embedded technologies are used by organizations worldwide and include the BlackBerry wireless solution, software development tools, and other software and hardware. RIM operates offices in North America, Europe and Asia Pacific.
Breakout trigger: $125
Buy 2010 $140 LEAP Call YKD-AH
UPL - Ultra Petroleum
Ultra Petroleum Corp. (Ultra) is an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. The Companys operations are primarily in the Green River Basin of southwest Wyoming. The Company continually evaluates other opportunities for the acquisition, exploration and development of oil and natural gas properties. As of December 31, 2007, Ultra owns interests in approximately 121,652 gross (62,756 net) acres in Wyoming covering approximately 230 square miles. The Company owns an interest in approximately 676 gross producing wells in this area and is operator of approximately 50% of the 676 gross wells. The Company owns interests in 252,629 gross acres in Pennsylvania. On October 22, 2007, the Company sold Sino-American Energy Corporation (Sino-American), which owned its Bohai Bay assets in China.
Breakdown trigger: $65
BUY 2010 $80 LEAP WSS-AP
APC - Anadarko Petroleum
Anadarko Petroleum Corporation (Anadarko) is an oil and gas exploration and production company with 2.43 billion barrels of oil equivalent (BOE) of proved reserves as of December 31, 2007. The Companys major areas of operation are located onshore in the United States, the deepwater of the Gulf of Mexico and Algeria. Anadarko also has production in China and a development project in Brazil. It markets natural gas, oil and natural gas liquids (NGLs) and owns and operates gas gathering and processing systems. In addition, Anadarko has hard minerals properties that contribute operating income through non-operated joint ventures and royalty arrangements in several coal, trona (natural soda ash) and industrial mineral mines located on lands within and adjacent to its Land Grant holdings. The Land Grant is an eight million acre strip running through portions of Colorado, Wyoming and Utah where the Company owns most of its fee mineral rights.
Breakdown trigger: $55
Buy 2010 $70 LEAP Call YPC-AN
BHP - BHP Billiton
BHP Billiton Limited is a diversified resources group. The Company is a producer of energy-related products, such as energy coal, oil, gas, liquefied natural gas and uranium. Its customer sector groups (CGS) are organized into nine business units: petroleum, aluminium, base metals, diamonds and specialty products, stainless steel materials, iron ore, manganese, metallurgical coal and energy coal. The Company generally extracts and processes minerals, oil and gas in the southern hemisphere from its production operations in Australia, Latin America and southern Africa. Its sales are concentrated in the northern hemisphere. In August 2006, BHP Billiton plc completed the sale of its 45.5% interest in the Valesul Aluminio SA joint venture to its joint venture partner, Companhia Vale do Rio Doce. In April 2007, the Company acquired a 33.3% interest in Global Alumina's Sangaredi Refinery Project in Guinea, West Africa. In July 2008, the Company completed the acquisition of Anglo Potash Ltd.
Breakdown trigger: $65
Buy 2010 $80 LEAP Call LPH-AP
HES - Hess Corp
Hess Corporation (Hess) is a global integrated energy company that operates in two segments: Exploration and Production (E&P) and Marketing and Refining (M&R). The E&P segment explores for, develops, produces, purchases, transports and sells crude oil and natural gas. These exploration and production activities take place principally in Algeria, Australia, Azerbaijan, Brazil, Denmark, Egypt, Equatorial Guinea, Gabon, Ghana, Indonesia, Libya, Malaysia, Norway, Russia, Thailand, the United Kingdom and the United States. The M&R segment manufactures, purchases, transports, trades and markets refined petroleum products, natural gas and electricity. As of December 31, 2007, the Company owned a 50% interest in a refinery joint venture in the United States Virgin Islands, and another refining facility, terminals and retail gasoline stations located on the East Coast of the United States.
Breakdown trigger: $88
Buy 2010 $100 LEAP Call WHS-AT
VLO - Valero
Valero Energy Corporation (Valero) owns and operates 17 refineries located in the United States, Canada and Aruba that produce conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants and other refined products. The Companys principal products include conventional and California Air Resources Board (CARB) gasolines, reformulated gasoline blendstock for oxygenate blending (RBOB), ultra-low-sulfur diesel, and oxygenates and other gasoline blendstocks. Valero also produces a substantial slate of middle distillates, jet fuel, and petrochemicals, in addition to lube oils and asphalt. Valero markets branded and unbranded refined products on a wholesale basis in the United States and Canada through a bulk and rack marketing network. It also sells refined products through a network of approximately 5,800 retail and wholesale branded outlets. Effective July 1, 2007, the Company completed the sale of the Lima, Ohio refinery to Husky Energy Inc.
Breakdown trigger: $30
Buy 2010 $40 LEAP Call YPY-AH
Breakout trigger: $37
Buy 2010 $50 LEAP Call YPY-AJ
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