The U.S. Department of Commerce provided several domestic American oil and gas producers permission to export condensate. This represents a departure from the long-standing practice of requiring American producers of crude oil to sell their product domestically.
Institutional investors and traders alike with a current bullish view towards refiners have been wringing their hands and gnashing their teeth over the potentially structural change in the economics of the refining business model. The business opportunity to accrue from the Department of Commerce ruling will likely be in those companies that are capable of transporting crude oil to export markets.
Kansas City Southern (KSU) and Union Pacific (UNP), two railroads with the ability to ship crude oil by unit train to various export terminals throughout North America, seem uniquely positioned to benefit from the eventual flow of crude oil. The model portfolio owns shares in both companies, and will continue to hold for long term growth potential.
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