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Warren Buffett And Carl Ichan Are Investing In Fuel Refiners $VLO $XOM $CVX $MPC $MUR $HES $MRO $COP $OXY



October 18, 2012 – Comments (0) | RELATED TICKERS: XOM , VLO , CVX

Turn Key Oil is typically focused on upstream oil & gas stocks / etfs but is occasionally covering midstream / downstream as there is considerable opportunity throughout the sector. 

Just last year, oil companies were downsizing their refinement facilities. Today, big names like Warren Buffett and Carl Ichan are investing in fuel refiners, attracted by the promise of larger refinery spreads based on lower oil prices.

Shifting balances of power between refiners and oil producers make it clear neither set of companies always dominates the other. Investors should seek the best values from both sets of companies.

There is an important distinction to be made here. Independent oil refineries such as Valero Energy (VLO) are cashing in on oil production. Big oil companies like Exxon Mobil (XOM) and Chevron (CVX), however, are struggling as they face concerns about defraying costs incurred by the smaller than hoped for profits from crude and natural gas. While the U.S. is leading the market in fuel production, it is the small refineries that are taking the lead, not the crude producers. Valero Energy outperformed Exxon 10 times over. Valero not only beat Exxon with its gains averaging 43%, but topped the charts by besting Standard & Poor’s 500 Index in energy.

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