April 15, 2002; Refiners Appear Timely

New York Harbor refining margins have moved decisively above their 200-day average in recent days, lagging the strength in natural gas and crude oil (see Chart).  That is logical in the sense that it can take time for refiners to pass on higher crude oil prices.  As crude oil gains slow, refining margins can catch up.   Similarly stocks like recommended MRO, COC/P and CVX have been relative laggards compared to recommended ECA, BR and SJT in 2002.  At the same time, P issued an earnings warning on first quarter refining results.  Thus we think this is a good time to be interested in our lagging recommendations, as the earnings to be reported shortly look backward to the trough from which operations have already emerged.