http://moneycentral.msn.com/content/invest/forbes/P86215.aspNothing seems to put the brakes on gasoline prices. Not promises by the Saudis to spur production. Not the approaching handover of power in Iraq, where the fear of sabotage and terrorism is adding $6 to $8 a barrel to the price of crude, says William Veno, a research director at Cambridge Energy Research Associates. Americans want their gasoline and are willing to pay for it, up to a point. That puts some stress on the system, as well as on pocketbooks. Demand, at an all-time high of 9.1 million barrels a day, is outstripping the capacity of U.S. refineries.
All of which is great news to foreign refiners, which are supplying an unprecedented 10% of our gasoline -- and to domestic guys, as well. In the first quarter, downstream (refining and marketing) profits climbed 39% at ExxonMobil (XOM, news, msgs) and 19% at ConocoPhillips (COP, news, msgs). Valero Energy (VLO, news, msgs) topped them all with a 46% gain to $250 million.
As U.S. capacity tightens, refiners have gained control over the marketplace. Foreigners can export gasoline, but domestics are much closer to their markets and can respond quickly to shifting demand for the increasingly complicated fuel blends required by various states. A year ago, Valero's net margin was 1.75%. This year it's 2.25%.
...more...
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
