Oil’s outlook is an important driver for Phillips 66 stock. Last month, I recommended a long position on oil prices. Since then, oil prices have doubled. After the global economy opens, oil demand will likely rise.
In the context of refiners, negative WTI crude oil prices are a benefactor. Globally, gasoline prices are benchmarked to Brent crude oil prices. This might explain why gasoline prices were just below $2 per gallon last month, while WTI prices were negative.
Last week, the Brent-WTI spread was at $3.1 per barrel. Last month, when WTI prices turned negative, the spread widened to $63 per barrel. Refiners could improve their profit by increasing their input in WTI benchmarked oil. In the past, there were instances when stock prices rose after Berkshire Hathaway’s exit. Read Walmart’s All-Time High—Should You Listen to Buffett? to learn more.
View more information: https://marketrealist.com/2020/05/berkshire-hathaway-exited-phillips-66-good-move/