With low refining rates, massive capital expenditure and plant shutdowns largely behind them and a rising global oil prices, 2011 looks to be a resurgent year for New Zealand Refining Ltd [NZR.NZX].
Back in October NZR was a Stock of the Week because its share price was 30c below what it closed at yesterday and I commented that higher oil prices will see this stock rise (well duh) and it has but the oil price rise has been a significant one. It has been mainly due to a very cold Northern Winter bumping up all sort of petrochemical products so it is unclear just how sustainable the oil price rise will be. Having said that the recent rise is bound to gain some traction even when the Northern ice melts away.
NZR is also subject to the NZ dollar US dollar cross but it looks like the Kiwi has finally started its appropriate ride down (ironically partly due to higher oil prices) to a value that reflects the dire outlook for our economy over the next 3-5 years.
These positive impacts for NZR seem to be conspiring all at the same time and should have a big impact on the fortunes of the company for 2011.
Historically the closing price of $3.91 yesterday is relatively low but you might want to put this on your watchlist if you are thinking of buying NZR and buy on any overall market weakness.
NZR @ Share Investor
Stock of the Week - Reprise: NZ Refining Ltd
Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd
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