Valero: How to Benefit From the Increasing Crack Spread
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by Melvin Pasternak
My colleague Nathan Slaughter knows just about everything there is to know about the energy industry. He's been warning investors that just because the price of oil is touching $100 a barrel doesn't mean you should necessarily buy stocks like ExxonMobil (NYSE: XOM) or Chevron (NYSE: CVX). There's good reason for that. As he puts it: "It's the relationship between oil and gasoline -- called the 'crack spread' -- that determines profitability of an integrated oil company. So don't assume that $3-a-gallon gasoline automatically means a cash windfall for major oil companies." [Go here to find out what Nathan likes instead.]But I've found a company that depends on the "crack spread" for its profits. Formed in 1980, this Texas-based Fortune 500 company is the largest independent oil refiner in the United States. It operates 14 refineries across North America and the Caribbean. The company is oneComplete Story »
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