As a Steelworkers’ strike, affecting 13% of the nation’s fuel supply, goes into its second week, the strike appears to be having a positive–rather than negative–effect on the oil companies the union has struck.
As the parties return to the bargaining table, rather than seeing their stock prices taking a hit, according to 24/7 Wall Street, two of the targeted companies, Tesoro Corporation and Marathon Petroleum Corp, are likely to “easily blow by [earnings] estimates.”
Two of the country’s largest oil refiners posted new 52-week highs Tuesday, even as both saw picket lines outside their plant gates. Tesoro Corp. (NYSE: TSO) has picketers outside three of its refineries in Washington and California, and Marathon Petroleum Corp. (NYSE: MPC) has picketers outside its Kentucky refinery.
Part of the union’s problem, according to 24/7 Wall St., is likely the timing as well as the limited nature of the strike.
Because refiners would be winding down operations now to go into maintenance and turnaround at this time of year anyway, refiners are probably not shedding any tears because the union selected this time to walkout. In a little over six weeks, the first quarter of 2015 will be over. Unless the Steelworkers choose to strike all the refineries where they represent workers, the refiners are probably going to drag their feet on settling with the union. It keeps costs low and output would be throttled anyway.
Read the rest of 24/7 Wall Street’s report here.