Core Viewpoint - The Zacks Oil and Gas - Refining & Marketing industry faces significant challenges due to margin volatility and rising operational costs, yet it has outperformed the broader energy sector and S&P 500 over the past year, presenting selective investment opportunities in companies like Phillips 66, Marathon Petroleum, and Valero Energy [1][10]. Industry Overview - The industry includes companies that refine petroleum products and non-energy materials, with profitability heavily influenced by refining margins, inventory levels, and demand patterns [2]. - Refining margins are volatile and affected by various factors including crude prices, product demand, and regional capacity utilization [2]. Trends Defining the Industry's Future - Margin volatility and demand uncertainty are persistent risks, with crack spreads subject to rapid changes due to external factors like weather and refinery operations [3]. - Operational flexibility and strong export linkages are crucial for managing volatility, allowing refiners to optimize yields and respond to market demands effectively [4]. - Rising costs and regulatory pressures pose challenges, with maintenance and compliance expenses increasing, which can compress margins and create operational risks [5]. Industry Rank and Outlook - The industry currently holds a Zacks Industry Rank of 197, placing it in the bottom 19% of 243 Zacks industries, indicating a bearish outlook [7]. - Analysts have revised earnings estimates downward, with a 17.5% decrease in the industry's earnings estimate for 2026 over the past year [8]. Performance Metrics - The industry has increased by 24.7% over the past year, outperforming the broader energy sector's 17% increase and the S&P 500's 16.8% gain [10]. - The current EV/EBITDA ratio for the industry is 5.05X, significantly lower than the S&P 500's 17.20X and the sector's 6.07X [13]. Company Highlights - **Phillips 66**: A major independent refiner with a refining capacity of nearly 2 million barrels per day, expected EPS growth rate of 25%, and shares have gained 21.6% in a year [16][17]. - **Marathon Petroleum**: A significant independent refiner with access to lower-cost crude, expected EPS growth of 18.8%, and shares have increased by 31.5% in a year [19][20]. - **Valero Energy**: Operates 15 refineries with a throughput of about 3.2 million barrels per day, expected EPS growth of 15.7%, and shares have risen by 47.1% in a year [21][22].

Core Insights - The upcoming storm is significant but not expected to cause a repeat of the severe grid collapse experienced during storm Yuri in 2021, due to improvements made since then [2][3] - Natural gas prices are being driven by the cold air following the storm, which will affect millions of people and multiple grids [5][6] - The storm's impact on commodities is primarily focused on natural gas, with limited effects on other commodities like heating oil [8][9] Natural Gas Market - Traders are concerned about the cold air that will follow the storm, as it will create a layer of snow and ice that prevents rapid temperature modification [4] - A secondary Arctic air mass is expected to follow the initial storm, which could further influence natural gas prices [6] - Despite the storm, there are indications that February may be warmer than initially anticipated, leading to a pullback in natural gas prices after a recent increase [7] Impact on Other Industries - Transportation sectors, particularly rail operations, may face disruptions due to the storm, as noted by CSX's earnings report [11] - Home improvement stores and industries that benefit from severe cold and snow may see increased demand following the storm [12][13] - Conversely, industries adversely affected by cold and snow will likely experience negative impacts [13] Future Weather Predictions - There are models predicting another significant storm for the upper I-95 corridor later next week, which could have detrimental effects on economies in the Mid-Atlantic and Northeast [14]

Group 1 - PBF Energy Inc. (NYSE:PBF) experienced a share price increase of 14.8% from January 7 to January 14, 2026, ranking it among the top gaining energy stocks for the week [1] - Citi raised its price target for PBF Energy from $29 to $36, indicating an upside potential of 11% from the current share price, while maintaining a 'Neutral' rating [3] - Piper Sandler also increased its price target for PBF Energy, keeping an 'Overweight' rating, citing the potential for US refining sector benefits from increased crude flow from Venezuela [4] Group 2 - PBF Energy is recognized as one of the largest independent petroleum refiners and suppliers in the United States, dealing in various petroleum products [2] - The company was included in a list of 10 High Yield Crude Oil Stocks to consider following recent developments in Venezuela [5]

Group 1 - PBF Energy Inc. is recognized as one of the largest independent petroleum refiners and suppliers of various petroleum products in the United States [2] - The stock was double upgraded from Underweight to Overweight by Piper Sandler, with a revised price target of $40, indicating a 22% upside potential from the current share price [3] - The company expects the rebuild activities at its Martinez refinery, which has been operating at partial capacity since early 2025 due to fire damage, to progress into February [4] Group 2 - Despite lower organic cash flow generation compared to peers, insurance proceeds from the fire incident are expected to support the balance sheet and potentially provide shareholder returns if margins improve [5] - PBF Energy is positioned to benefit from the U.S. strategy in Venezuela, as it already purchases crude from Chevron and could increase its intake, which may enhance refining operations and margins [6]

Company Overview - PBF Energy Inc. (NYSE:PBF) is one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants, and other petroleum products in the United States [2]. Recent Stock Performance - The share price of PBF Energy fell by 16.19% between December 10 and December 17, 2025, making it one of the Energy Stocks that lost the most during that week [1]. Analyst Ratings and Price Targets - On December 8, Wolfe Research analyst Doug Leggate downgraded PBF Energy from 'Peer Perform' to 'Underperform', setting a price target of $23 due to a tactical underweight in the US refining sector and declining West Coast margins [3]. - Conversely, on December 12, Mizuho analyst Nitin Kumar upgraded the stock from 'Underperform' to 'Neutral', raising the price target from $31 to $38, indicating an upside potential of almost 43% from the current share price at that time [5]. Industry Challenges - The broader US refining sector is expected to face headwinds, including lower distillate cracks due to robust European inventories and potential risks associated with a Ukraine-Russia peace deal, which could lead to lower global crude prices [4].

Heating Oil Market Overview - Heating oil season officially starts with furnace activation, weather significantly impacts energy expenses [1] - Cold snaps or major storms cause demand spikes, driving up wholesale energy prices [1] Pricing Factors - Crude oil constitutes approximately 41% of heating oil cost, refining 24%, distribution and marketing 19%, and taxes 16% [2] - New York USD futures benchmark averaged 2.2876% per gallon in October, serving as a key indicator [2] Future Outlook - December and January futures show lower prices, suggesting potential relief [3] - US EIA forecasts heating oil users are projected to pay less for the upcoming season [3] - Market conditions like cold snaps, crude oil price movements, or supply disruptions can quickly shift the forecast [3]