For an integrated oil company like ExxonMobil
Then there is a company like Tesoro
In case you didn't make it out to a haunted house this past week, you could always take a look at Tesoro's income statement for a fright. Revenue rose 5% quarter on quarter, but crack spreads collapsed from nearly $22/barrel last quarter to $9 and change this time around. In Hawaii, the margin actually narrowed to $0.11. All in all, the refining segment's operating profit plummeted 83% to $132 million.
Yes, there is a retail segment at Tesoro as well, but with negative $7 million in operating income year to date, it does not and will not move the needle much. It's all about the crack spread, and she can be a cruel mistress. The Elvira of Energy, if you will.
Things have already turned around a bit through the first month of the new fiscal quarter. Management reported current West Coast cracks of about $17.50, about 50% above the third-quarter average in California. Unless you're an investor in a shipper like Frontline