Nov. 4 (Bloomberg) -- Alon USA Energy Inc., a Dallas-based owner of three U.S. refineries, had its biggest intraday gain ever after announcing that its Louisiana refinery would begin receiving cheaper sources of crude.
Alon gained 28 percent to $9.97 at 1:12 p.m. in New York, after rising 33 percent to $10.37. Before today, the shares had risen 31 percent as the difference between the cost of crude and the price at which refiners can sell fuel reached a record average of $32.54 in the third quarter, according to data compiled by Bloomberg.
The company is increasing how much U.S.-produced crude it receives at its Krotz Springs, Louisiana refinery. By April 2012, the plant will process 25,000 barrels a day of West Texas Intermediate oil, which trades at a discount to worldwide prices, Alon Chief Executive Officer Paul Eisman said today in a conference call with investors.
Alon will boost earnings significantly as it buys more oil at a discount and sells gasoline and other products at higher prices linked to more expensive crude slates, Sam Margolin, a New York-based analyst at Global Hunter Securities LLC, said in an interview today.
“It’s a big deal,” said Margolin, who rates Alon “neutral” and doesn’t own shares. “It’s a small footprint, and they only have three refineries, but they are transitioning earnings power to their largest asset.”
Alon USA is majority-owned by Israeli fuel maker Alon Israel Oil Company Ltd.
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