Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Western Refining
So what: The whole refining sector is taking it on the chin today, with Tesoro
Now what: The spread between oil price and gasoline, known as the "crack spread," has stayed relatively level today, so the sell-off seems to be a bit overdone. I'm not saying there aren't plenty of reasons to be worried about refiners going forward, but the move today looks to be a panic that should have happened a few days ago. Investors need to keep a close eye on oil prices and the crack spread to see if the economy can handle higher fuel prices. If it can't, refiners could be in for a big correction after a nice ride higher for most of the past year.
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