Oil prices continue to surge to record levels, with crack spreads reaching historical highs that are benefiting refiners. ECB President Christine Lagarde and Bank of England Governor Andrew Bailey are publicly acknowledging the importance of refining margins. Multiple factors are sustaining this bullish trend: a decade of limited investment, declining mature fields, and major geopolitical disruptions, particularly in the Middle East. Refiners are posting record profits, while oil service companies like SLB have rallied without yet reaching all-time highs. Trader Mike Khouw favors longer-dated long calls financed by shorter-dated short strangles to capitalize on this momentum.
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