One Oil Name That Stands Out: Paul Sankey
Gasoline prices — along with oil company profit margins — will likely head downward in the next several weeks, but one stock still has growth potential, Deutsche Bank oil analyst Paul Sankey said Thursday on CNBC.
On "Fast Money," he said that the industry would face price pressures.
"We believe that the medium-term impact will be on the demand side and will be negative for prices and margins, both of crude oil and of refining margins, and, ultimately, gasoline prices," he said.
As hundreds of gas stations throughout the New York region are seeing long lines and hours-long waits from customers looking to fill up their tanks following Hurricane Sandy, prices will tend to spike in the near-term.
But that won't last, Sankey added.
Overall, the industry was poised for a downturn.
"At a given point, you have to be brave enough step back and worry about the next move being down. Seasonally, that would happen anyway," he said. "The big demand season is over. It wasn't the most heroic call to go neutral.
"We did get this unfortunate and tragic issue with refining, which of course is this tragedy we've had in the Northeast."
Yet one oil company's stock still stood out — Phillips 66.
"We love it. We do think it's a good story," he said.
"With Phillips 66, you have pretty much the No. 1 global chemicals company, CPC Chem, within that PSX ticker," as well as natural gas liquids gathering, he said, "which gives the company more of a play on the unconventional gas and oil revolution that we're seeing here in the U.S. than just a pure oil revolution play, which is what all the other refiners are."
Trader disclosure: On Nov. 1, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Guy Adami's wife works at Merck; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long BAC call spreads; Karen Finerman is long JPM; Karen Finerman is long JPM calls; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long CMI; Karen Finerman is long SPY; Karen Finerman is long IWM; Karen Finerman is long DY; Enis Taner is long GS; Enis Taner is long AMZN puts; Enis Taner is long UHP calls; Enis Taner is short CMI call spreads; Simon Baker is long AAPL; Simon Baker is long WFC; Simon Baker is long MSFT; Simon Baker is long AMZN.
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