Are Refining Companies to Blame for Your Pain at the Pump?
Refining stocks have surged this year. Little-known oil refiners PBF Energy (NYSE: PBF) and Delek US Holdings (NYSE: DK) have seen their share prices more than double in value. Meanwhile, larger industry leaders Valero (NYSE: VLO), Marathon Petroleum (NYSE: MPC), and Phillips 66 are up between 30% and 60% on the year. These huge surges are coming amid a brutal bear market for other stocks.
Fueling this year's surge in refining stocks is their soaring profits. The sector is cashing in on the widening spread (known as the crack spread) between where they buy oil and the price they can sell refined petroleum products like gasoline, jet fuel, and diesel. Those product prices are also surging this year due to resurgent demand. That's causing consumers of those products to pay even more, begging the question of whether refiners are part of the problem. Here's a look at the current state of the refining sector.
Tom Nimbley, the CEO of independent refiner PBF Energy, commented on the current refining market environment in the company's first-quarter earnings press release. He stated: "Global supply and demand balances were tight coming into the year. Low product inventories have not recovered due to increasing demand and significant maintenance activity across the global refining system."
Source Fool.com
