NEW YORK, NY--(Marketwire -08/03/12)- The Oil & Gas Refining & Marketing Industry has soared in 2012 as result of falling commodity prices. U.S. oil prices have fallen 11 percent this year, while the S&P Oil & Gas Refining Index has soared over 35 percent, outperforming the S&P 500 Index by a large margin. "The U.S. refiners are benefiting by having the cheaper oil," says energy analyst Andy Lipow. "It all comes down to the raw material." Five Star Equities examines the outlook for companies in the Oil & Gas Refining & Marketing Industry and provides equity research on Phillips 66 (PSX) and Tesoro Corporation (TSO).
Industry bellwether Valero Energy shares surged Tuesday after reporting earnings that topped analyst estimates. The company and other U.S. refiners have benefitted from lower U.S. oil prices compared to the benchmark Brent crude. West Texas Intermediate is currently priced $17 a barrel lower than Brent crude. Lower oil prices have allowed refiners to reduce input costs and increase their margins. "The situation for U.S. refiners is not expected to change over the next 6-12 months," stated Lipow.
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Phillips 66's Refining and Marketing operations include 15 refineries with a net crude oil capacity of 2.2 million barrels per day, 10,000 branded marketing outlets, and 15,000 miles of pipeline systems. The company recently reported second-quarter earnings of $1.2 billion and adjusted earnings of $1.4 billion. Shares of Phillips 66 are up over 16 percent for the year.
Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of approximately 665,000 barrels per day. The company reported second quarter 2012 net income of $387 million, or $2.75 per diluted share compared to net income of $218 million, or $1.52 per diluted share for the second quarter of 2011.
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