Oil Price Surge Benefits Integrateds, Not Refiners

[Stocks-to-Watch]

Continuing unrest in the Middle East, especially in Libya, has roiled the markets today and caused oil prices to jump. The price of light crude for March* delivery was up more than 7% in afternoon trading.

However, not all oil-related companies are benefiting equally from oil’s rise.* Some of the major integrated companies, like Exxon Mobil (XOM) and Chevron (CVX) have been able to overcome the bearish tide and are trending upward.

Yet, refiners have not been so fortunate, with losses across the board, including stocks like Sunoco (SUN), Valero (VLO) and Tesoro (TSO).

As a rule, while the rising price of oil has a direct relationship to intergrateds’ profits, the picture is more complicated for refiners. Refiners make money on the spread between the price of oil (which they must buy) and the price of gasoline and diesel (the product that they sell). If gas and diesel prices do not rise apace with oil prices, refiners will be squeezed.



Original Article Source by Barrons.com