Energy Q&A Part II: Investing in Oil Refiners and Oil Service Companies

Q: “Why is it that the refiners aren’t making any money with oil as high as it is? Aren’t they charging more for their services?” Refiners make money on the “crack spread”. They profit from the difference between the price of crude oil they buy and they price they receive when they sell the refined product. But right now, refiners are squeezed between rising crude prices and consumer resistance at the gas pump. Refiners have to pay the world price for crude oil. The markets dictate that price. Right now, there are no major physical shortages in the reports from the oil…