NEW YORK, NY--(Marketwire -08/15/12)- U.S. refining companies have soared in 2012 as new crude production from Texas and the Midwest has resulted in profits reaching their highest levels since 2007. According to data collected from Bloomberg, the difference between the cost of crude and the price companies could sell fuel in the April-June quarter was the largest margin for a second quarter at $29.05 a barrel. The Paragon Report examines investing opportunities in the Oil & Gas Refining & Marketing Industry and provides equity research on Tesoro Corp. (TSO) and Phillips 66 (PSX).
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U.S. refiners have outperformed all other energy sectors in the S&P 500 Index with an average gain of 42 percent. In comparison the S&P 500 Integrated Oil & Gas Index has gained just 2.85 percent year-to-date. The industry's resurgence has even attracted famed investors Warren Buffett and Carl Icahn.
"The prospects for U.S. refiners have turned around dramatically," said John Auers, senior vice president of Turner Mason & Co., a petroleum and refinery consulting company. "Cheap crude has given an advantage to the U.S. refining system, already the most advanced, most complex and most efficient in the world."
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Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of approximately 665,000 barrels per day. Shares of the company soared nearly 10 percent Monday after the company announced it had purchased BP's integrated Southern California refining and marketing business for $1.175 billion.
Phillips 66's Refining & Marketing business includes 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's CEO Greg Garland recently stated in their second-quarter earnings conference call that have decided not to sell their Alliance refinery in Louisiana.
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