Image source: Calumet Specialty Products Partners corporate website.

\What: Shares of Calumet Specialty Products Partners (NASDAQ:CLMT) started to shake off their miserable start to 2016 by gaining 21% in March. With no recent news pertinent to the company as of late, we can pretty much chalk up these gains to the rise in crude oil prices. If Wall Street acted logically, though, this wouldn't happen.

So what: Too often, all companies in the oil and gas industry are lumped into one big basket. So when the price of those commodities start to rise, there's an instant reaction to buy oil stocks. The problem with this logic is that the prospects of certain parts of the industry are actually hurt by rising oil prices, and Calumet is a textbook example of this.

As a refiner that focuses on producing petroleum products other than gasoline and diesel, the company's business waxes and wanes on the crack spread -- the price difference between a barrel of crude oil and the price of the refined products that barrel generates. As crude oil prices have climbed, the crack spreads in all of the various regions of the U.S. have narrowed to much lower than the levels we saw in 2015 (it should be noted that crack spreads in 2015 were some of the best in a decade). 

Even with those high crack spreads in 2015, Calumet struggled to string together strong enough results to justify its hefty distribution payout to investors. When you throw Calumet's outsized debt profile on top of lukewarm results, it would seem that Calumet's 21% gain seems a bit unjustified.

Now what: Even when you factor in Clumet's hefty distriubtion payment, the company has really struggled to generate returns for shareholders. For the company to turn this situation around, it needs to address its cost structure and debt levels. This means it should seriously consider cutting its distribution payment. With the stock yielding 24% today, the market has pretty much already priced in a cut. Until the company seriously tackles these two pressing issues, it's probably best to avoid the temptation of that sky-high yield and shy away from Calumet's shares.