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Oil Prices are High, But These 2 Refining Stocks are Still Crushing It
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Key Takeaways
PARR and DINO have each gained more than 50% over the past six months despite elevated crude oil prices.
PARR's July refining index held at $31.34 a barrel as fuel demand stayed strong and inventories tight.
DINO sees low fuel inventories and healthy end-product demand supporting continued strong refining margins.
The Iran war shock is driving high crude oil prices, with West Texas Intermediate (“WTI”) crude currently approaching $100 per barrel. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel this year, higher than $65.40 last year.
Over the past six months, leading refiners such as Par Pacific Holdings, Inc. (PARR - Free Report) and HF Sinclair Corporation (DINO - Free Report) have each witnessed more than 50% gains despite a highly favorable crude pricing environment. Let’s delve deeper.
Image Source: Zacks Investment Research
Constrained Global Refining Capacity
The global refining capacity is constrained, and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not in abundant supply, refining margins for refiners are quite strong.
Thus, with crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like PARR and DINO, even though high crude prices have been increasing refiners’ input costs.
Time to Bet on 2 Refiners: PARR, DINO
Par Pacificcontinued to benefit from a strong refining market at the start of the third quarter. Its refining index, which is a rough measure of how profitable it is to turn crude oil into products like gasoline and diesel, was still very high in July at $31.34 per barrel, only slightly below the second-quarter average of about $33.
Demand for fuels remained strong, especially on the mainland, while global fuel inventories stayed relatively tight. In simple terms, there was still healthy demand for refined products and limited excess supply, which helped PARR continue earning attractive margins from its refineries.
PARR appears well-positioned to benefit from still-strong refining margins, firm fuel demand and tight global product inventories.
HF Sinclairis not an exception. On its second-quarter 2026 call, the company mentioned that wars in the Middle East and Ukraine have disrupted refining capacities. DINO mentioned that inventories of fuel in the United States and in its key operating regions are low, especially when the demand for the end products remains healthy, thereby creating opportunities to continue to earn healthy refining margins.
Last Words
High oil prices don’t always mean the refining business is weak. In fact, the situation is the opposite now, making PARR and DINO stocks attractive. Both companies currently sport a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Oil Prices are High, But These 2 Refining Stocks are Still Crushing It
Key Takeaways
The Iran war shock is driving high crude oil prices, with West Texas Intermediate (“WTI”) crude currently approaching $100 per barrel. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel this year, higher than $65.40 last year.
Over the past six months, leading refiners such as Par Pacific Holdings, Inc. (PARR - Free Report) and HF Sinclair Corporation (DINO - Free Report) have each witnessed more than 50% gains despite a highly favorable crude pricing environment. Let’s delve deeper.
Constrained Global Refining Capacity
The global refining capacity is constrained, and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not in abundant supply, refining margins for refiners are quite strong.
Thus, with crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like PARR and DINO, even though high crude prices have been increasing refiners’ input costs.
Time to Bet on 2 Refiners: PARR, DINO
Par Pacificcontinued to benefit from a strong refining market at the start of the third quarter. Its refining index, which is a rough measure of how profitable it is to turn crude oil into products like gasoline and diesel, was still very high in July at $31.34 per barrel, only slightly below the second-quarter average of about $33.
Demand for fuels remained strong, especially on the mainland, while global fuel inventories stayed relatively tight. In simple terms, there was still healthy demand for refined products and limited excess supply, which helped PARR continue earning attractive margins from its refineries.
PARR appears well-positioned to benefit from still-strong refining margins, firm fuel demand and tight global product inventories.
HF Sinclairis not an exception. On its second-quarter 2026 call, the company mentioned that wars in the Middle East and Ukraine have disrupted refining capacities. DINO mentioned that inventories of fuel in the United States and in its key operating regions are low, especially when the demand for the end products remains healthy, thereby creating opportunities to continue to earn healthy refining margins.
Last Words
High oil prices don’t always mean the refining business is weak. In fact, the situation is the opposite now, making PARR and DINO stocks attractive. Both companies currently sport a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.