Refiner Stocks Keep Plunging

The major independent oil refiner stocks took a beating yesterday, and the dash for the exists is continuing today.

After falling 5.7% yesterday, Valero Energy (VLO) is off 4.5% today, while Marathon Petroleum (MPC) is down 6.2% today following its 4.8% decline yesterday. Tesoro (TSO) fell 3.2% Tuesday and is down 5.3% today, while Phillips 66 (PSX) is down 6.5% after a 3.6% drop. HollyFrontier (HPC) is down 4.3% at the latest after falling 3.8% yesterday.

It could be the news of the costs required by new EPA rules — Valero yesterday said it would run into the hundreds of millions of dollars — gave the excuse for some profit-taking. In the past 12 months through yesterday’s close, Valero had gained 70%, HollyFrontier rose 62%, Marathon gained 105%, Tesoro had risen 124% and Phillips 66 had gained 97% since its IPO last April.

It’s also worth noting that the price of crude oil is down 2.1% today, never a good sign for refiners. roughly the same decline as West Texas Intermediate (WTI). More troubling for refiners, crack spreads — the difference between oil and gasoline prices — have tumbled recently, with gasoline at a premium of $29.81 a barrel to WTI today; that figure was $33 one week ago. As Bloomberg notes, the narrowing is due to a decline in gasoline prices, a move that hurts refiners:

[Gasoline] Futures touched $2.996 a gallon, the first time prices dropped below $3 since summer-grade gasoline began trading March 1. The Energy Department said gasoline demand in the four weeks ended March 22 averaged 8.43 million barrels a day, 0.2 percent lower than a year earlier.