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CVR Refining Has Fallen 13% This Year: What’s Ahead



CVR Refining in 2018

CVR Refining (CVRR) stock has fallen 13% so far in 2018. In comparison, Calumet Specialty Products Partners (CLMT) has fallen 8%, the Alerian MLP ETF (AMLP) has fallen 12%, and crude oil prices have risen ~5%. In this series, we’ll look at CVR Refining’s recent performance and analyze its key indicators.

As the above graph shows, CVR Refining has risen ~60% in the last year. It is trading 2% above its 50-day moving average and 22% above its 200-day moving average.

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Could crack spreads support CVRR?

Improved crack spreads boosted CVR Refining’s refining margin in 4Q17, bringing its available cash for distribution to $65.6 million in 4Q17 from none in 4Q16.

The benchmark Gulf Coast 3:2:1 crack spread averaged $14.95 per barrel in 1Q18, compared with $13.58 per barrel in 1Q17 and $17.78 per barrel in 4Q17. Weaker spreads in 1Q18 might impact CVR Refining’s results for the quarter. The spread, however, has improved since 1Q17. CVR Refining uses the NYMEX 2:1:1 crack spread as a benchmark to assess its operating performance.

CVRR’s distributions

CVR Refining paid a distribution per unit $0.45 in 4Q17 and $0.94 in 3Q17. CVR Refining is a variable distribution MLP. It did not pay distributions for the seven quarters prior to 3Q17. CVR Refining is trading at a yield above 10%. In the next part, we’ll look at institutional investors’ views on CVR Refining.


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