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Before The Bell: Refiners On Diesel; Caterpillar Looks Brighter

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High crude prices are forcing refiners to look elsewhere. Caterpillar raises its guidance.

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Morning Perspective: Refiners Look to Diesel

According to The WSJ, with crude oil reaching record prices and pulling along with it the price of gasoline, refiners are focusing on another source for profits: diesel. Global demand for diesel has increased while demand for gasoline has been hurt due to high prices. Analysts expect this trend to continue because developing countries like China and India may favor diesel due to its flexibility in powering industrial plants as well as transportation. Further, while the DOE's Energy Information Administration expects diesel and gasoline products to grow less than 1% in 2008 from the previous year; forecasts call for diesel demand to grow 1.6%, double that of gasoline. For context, read Professor Adam Michael's column from December, Trends Affecting Oil Price.

From the Bull Pen: Bulls can look to Marathon Oil (MRO) for an upside try; sell-stops below the 50-day ($52.30).


From the Bear Cave
: Bears remain skeptical on the refiners and can play the downside in Tesoro (TSO); Entry at $38 with buy-stops above.



CAT Guides Higher


Shares of Caterpillar (CAT) rose in after-hours trading on top of yesterday's strong performance. According to Bloomberg, the world's largest maker of bulldozers and excavators raised its forecast for 2010 citing continued spending worldwide on infrastructure and machinery sales especially in the emerging markets. The company said sales would come in at $60 billion, a 20% increase and above analysts' expectations. Although forecasts for 2008 EPS was unchanged (between $8-10 per share); the company said it expected profits to grow at an annual rate of between 15-20% through 2012. For context, read Global Decoupling Underway by Minyan Bob Adams.

From the Bull Pen: Those bullish can play CAT with sell-stops below the 50-day ($69). Another alternatives may include Deere (DE); sell-stops below $80.


From the Bear Cave
: On the technical picture bears see the CAT rallying right into resistance at $75. Buy-stops can be set above on downside attempts.


For more ideas, see Minyanville's Spotlight Stocks.


Quick Check Around the World

Asian trading closed with the Hang Seng +1.86%, Nikkei +1.60%, Sensex +0.03%, Taiwan +0.64% and Shanghai -2.30%.

A quick look towards Europe finds the CAC +1.60%, DAX +1.01%, FTSE +1.28%.

As of 8:30 AM EST, S&P futures are lower -3.60 points to 1320 and Nasdaq Futures are down -5 points to 1745.


A Look At Commodities

Commodities are lower. Crude oil is down -0.15 to 108.58. Gold is up +2.10 to 978.00. Silver is lower -0.276 to 19.400 and copper is down -1.00 to 378.90.

The dollar index is lower -0.758 to 72.521.


On the Radar

Economics

MBA Mortgage Applications: -1.9% vs. 3.0% prior
Bloomberg Global Confidence: 13.08 vs. 14.34

2:00 Monthly Budget Statement: -$150.0 bln cons.

Click here for the full trading radar.


Happy Hump Day! Good luck!

GET THESE INSIGHTS AND MORE IN REAL-TIME. CALL 212-991-9357 FOR A 14-DAY FREE TRIAL TO THE BUZZ & BANTER OR CLICK BELOW.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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