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Short Interest Rising in Tesoro; Shorts Covering Airline Positions

by: Jessica Johnson September 04, 2008 | about stocks: AMR / DAL / TSO / UAUA    

Jessica Johnson

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The refiner Tesoro (TSO) slid 6.9% to $17.28 Tuesday, as crude oil fell as much as$8 a barrel as hurricane Gustav faded - before recovering later in the day. Coal companies were particularly hard hit as well. Short interest has been building up in Tesoro for the last three months, although the percentage of the company's Market Cap out on loan (%MCOL) has been higher than 10% for the last two years. Now, this figure is closer to 30%, with 27.3% MCOL today. Utilisation is at 72% which means there is little left to borrow, and there are 33 Days to Cover.

Tesoro

UAL (UAUA), Delta (DAL) and AMR (AMR) soared as the decline in oil prices gave energy-sensitive stocks a boost. Short investors have covered their positions in UAL, and the %MCOL fell from 35% in early August to just over 20% today. AMR, who we have blogged on in the past, has probably seen the most amount of short covering - the %MCOL dropped from 28% in early August to 12.75% today (please see this graph below).

AMR

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This article has 1 comment:

  •  
    Sep 04 04:31 PM
    It seems to me that shorting TSO or VLO here is a bet that oil will vanish in the next ten years. At 75% of book and maybe 40-50% of replacement cost, either oil refiners will shut down and disappear or we will have new refining capacity coming soon. Neither seems likely, so shorts must have a very short term agenda or are just bored. Or maybe it is the other side of the airline/oil hedge?
    Reply
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