Why do oil refineries go down when the price of oil goes up?

Question

Why do oil refineries go down when the price of oil goes up?

Answer 1

The US peak oil production was in the 1970s.  Saudi Arabia has used up 1/2 of their reserves.  So supply side economics says prices go up- which it has.  But look at it this way also, why invest in the running of refineries when there is nothing to refine?  it is a waste of money.

Oil companies are like any other companies.  They make money for their stock share holders.  If they can make a higher margin (profit) by investing in the stocks, then that is where they put their capitol.

The purpose of oil companies is not necessarily to produce oil.  it is to produce profits.

Answer 2

Scheduled maintenance.

The U.S. has not built a new refinery in over 30 years.

The existing refineries are getting older and older by the day.

Old refineries need MORE not less maintenance than a newer refinery.

Sorry.

Answer 3

Basic supply and demand. If they reduce the supply of gas available, then can keep the price high and drive it higher!

Answer 4

Oil refineries go down when the price of oil goes up because of the fact that oil refineries have to buy the oil off of the open market to refine it. Valero and other companies have to purchase barrels of oil and do not pump it out of the ground. For this reason their stock value goes down because they have to buy the oil off of the open market at elevated prices. This cuts into their profit margin.

There are a few refiners that have been going  up with the price of oil. Companies like Exxon, Chevron, etc go up because they also pump the oil out of the ground as well as refine the oil. They don't have to purchase the barrels of oil. They can make money off of the higher price of oil