Tesoro Petroleum Inc fka TSO

[OilStockReport]

Here is a little TSO analysis/update.

Tesoro is a refining company located strictly in the western U.S., including Alaska and Hawaii. According to the company's Q1 2011 earnings release , TSO greatly benefited from rising crack spreads on the west coast and had a gross margin o f $14.33 per barrel. TSO is able to refine very heavy crudes, so it buys crude at a discount which increases profitability. Volume was up 11% from the previous quarter due to less refinery outages, and earnings were $.74 per share compared to a loss of $1.11 last year. TSO provides a nice summary of the various crack spreads throughout the United States which illustrates the advantages of running refineries in the middle and western parts of the U.S. rather than the Eastern part. Crack spreads (.pdf) per barrel are in the mid 20s in the middle and west, while only 10 on the east coast. This shows the huge advantage middle and west coast refiners have over east coast refiners.