Refiners: sweet gig - FT.com Leery of buying the dip in oil explorers? There may be a better opportunity downstream - among US oil refiners. Being a refiner based in America has been a (light) sweet gig in recent years. Production of crude is at record levels. Due to a ban on exports and the challenges in moving oil around the country the supply glut has made this crude cheaper, relative to the global oil price. Yet the price at which refiners sell gasoline and other refined products is based on the higher global price - creating a nifty arbitrage. Over the past five years, the shares of three big US refiners, Valero, Phillips 66, and Marathon Petroleum, have at least doubled, beating the S&P 500. But the recent plummet in oil prices worldwide have made them trickier to evaluate. Third-quarter earnings for the US refiners were strong (even ExxonMobil and Chevron were bolstered by their refining segments). But the question is where the spread between the global benchmark Brent and the US benchmark West Texas Intermediate heads. In September, that differential essentially disappeared but it has since widened to $6. Most analysts believe the spread will enter 2015 at between $8 and $10 with WTI in the mid-$80s and Brent in the low $90s. Looking only at oil price spreads ignores company-level complexities. Oil refineries are located across the US. Certain regions, most notably the "mid-Continent" and Gulf coast, have the easiest access to cheap US crude. Refiners also produce not just gasoline but petroleum-based chemicals. Most interestingly, in recent years some refiners have spun out their oil storage and pipeline assets into master limited partnerships, trying to take advantage of the appetite for yield. Barclays believes that the refiners are undervalued because these other segments are ignored. Refiners may trade as much as 50 per cent below their intrinsic value. Look for the refiners to play up that discount as worries grow about the end of the crude export ban.