Are refiners really a good investment?
OK, so maybe I am missing something, but aren't refiners middlemen who make money on the gap between crude prices and pump prices when you really simplify things? Aren't they businesses that are about to face significant downtime and rebuilding costs that will put a damper on earnings?
It seems to me that the drillers are really the people that profit from higher crude prices. Notice all the investigations on price-gouging that came out when gas was at $3.40 a gallon? The US public is used to seeing LOW gas prices; this builds in a heavy resistance to the price increases that refiners would need to continue rapidly growing profits....
A contrarian position might just be the way to go with a stock like VLO. Of course it is not in my particular trading strategy to try to step in front of a moving bus like some contrarians do, so you most likely won't catch me shorting VLO anytime soon.