Phillips 66 (PSX)

Chart shows a long uptrend from October followed by a short term reversal. Be careful.

The base built in summer and fall of this year is classic. It followed through and is in a nice uptrend. You would stay with it as long as it is going up.

Once again, differentials have widened. There’s been a turnaround in the refineries in the Gulf Coast, so they shut down, which causes a lot of oil to show up in inventories. A good time to play refineries on the East Coast because they can buy very discounted crude from the Bakken and make a really big profit. This is a very volatile stock and not to be owned for the long run. Over the next 12 months differentials will probably narrow because of 2 pipelines that are going to come on in the next 12 months and bring oil down to the Gulf Coast. Be careful.

This has been on an unbelievable tear. US energy stocks have done way better than Canadian producers. Everybody’s worried about the heavy oil differentials and the Keystone. Maybe it’s time to switch to a Canadian.

Refining assets which have done really well of late. Also, have a midstream piece which is potentially undervalued. This is one that probably has a modest amount of upside.