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Are These Dividends at Risk?

We think independent refiners look attractive--and we think their payouts are safe.

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With the rollout of a COVID-19 vaccine underway, we think there is light at the end of the tunnel for independent refiners. Although we expect that an economic recovery is likely to begin in 2021, an improvement in refining market indicators, such as inventory and utilization levels, is likely to lag. That could keep a lid on margins in the near term.

Ultimately, however, we see petroleum product demand recovering toward pre-pandemic levels, normalizing inventory and utilization levels and lifting refining margins toward midcycle levels.

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