Professor Elam

One might think riding the energy bull is the key to easy profit success, apparently not. Today VLO anounced lower earnings. It seems higher costs at refineries, including equipment, have cut earnings forecasts. My guess is that the weak dollar, causing higher not lower equipment costs with any foreign content, think steel for example, is part of the story.  Now consider that VLO is now using oil purchased a few weeks ago, but today prices are lower, ouch, now they re selling the refined product for less but paid more for the crude oil, result, lower profit, lucky they are avoiding losses. Now if oil retreats to say 90, will VLO be paying more for oil and selling it for less as the price ratchets down? Check out a chart of VLO.