don barrett

Tesoro-Making more by doing less.

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Tesoro Corporation is a oil refinery company headquartered in San Antonio,Texas. TSO operates 7 refinerys with capacity of 660,000 barrels a day capacity. Higher oil prices cut the "crack spread",the profit made per barrel,but TSO has a way of fighting rising oil prices. All they have to is do is cut back refinery time and thus drive up the cost of gasoline. TSO has cut refinery operating time from 89.6% in June 2006 and $2.26 dollar a gallon gas to March 2007 refinery operating capacity at 82.2% and gas at $3.29 a gallon. And lest you feel we are facing a shortage of gas were not. Gas supplys in March 2007 are at 11% over March 2006 levels.
TSO net earnings were $801 million or $5.73 per share in 2006 compared to net earnings of $566 million or $4.06 per share in 2007. Net earnings were down in 2007 but TSO has reduced debt,lowered oil costs buy buying more local oil and expanded retail outlets through acqusition.
With the current reduced refining rates by TSO and the other oil companys following TSOs lead it should be a record year. Staying at current reduced refining capacitys,it wont take long to burn off the 11% build in gas inventorys and the media will be screaming "gas shortages" and it will all result in higher gas prices this summer. Despite what the media and other big wigs tell you oil consumption is down in the U.S. and worldwide and we are paying higher prices due to the reduced usage.
TSO has another ace up their sleeve and I guess all the oil companys do. TSO has over 900 retail outlets so as they reduce production and operating costs,at the same time they are driving up gas prices and all their retail outlets jack the cost per gallon up and TSO has a monster year!
So,in conclusion I don't see how you can go wrong with TSO. If they want a bigger profit they just work less and profits go up. Pretty sweet deal!