Product Cracks Continue To Drive Refiners Higher (VLO)

Product cracks, specifically the summer gasoline crack, continue to help push refiners to new recent highs.

The gasoline crack is the industry term for the difference between gasoline prices at the wholesale level and crude oil. A higher crack (margin) will be reflected in increased revenue at a refiner.

Even though refiners such as Valero (NYSE: VLO) have moved 18% since the beginning of 2010, there is still upside left in this stock. With margins continuing to be strong, and demand currently 3% higher than this time last year, VLO could revisit the 2009 highs near $25 (currently near $19.75).