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Refiners benefit from domestic oil boom

The domestic shale oil boom has let to profits for refiners throughout the region.
by Adam Wilmoth Published: May 10, 2013

The flood of domestic oil produced over the past five years has boosted jobs, royalty payments and contributions to tax coffers.

It also has led to higher profits, and not just for the oil producers.

It's quarterly earnings season, the time when publicly traded companies report to federal regulators and their shareholders all kinds of details as to how much money they brought in and how much they spent on operations.

In recent days, refiners Phillips 66 and CVR Energy each said their earnings per share doubled from the first quarter 2012 to the first quarter 2013. Valero saw its per-share profits more than triple.

Much of the reason for the earnings boost is because of increased access to high-quality, lower-priced oil produced in Oklahoma, Texas and North Dakota.

But the good news for refiners is not necessarily welcome by producers.

Part of the reason for the refinery profits is that the glut of oil produced in the middle part of the country has overwhelmed the region's pipeline and storage infrastructure, stranding billions of barrels of oil in Cushing and other terminals, waiting in line for access to Gulf Coast refineries.

As a result, West Texas Intermediate crude, which is priced in Cushing, has traded for $20 to $30 a barrel less than the international Brent crude price for the past few years.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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