Integrated producers cut your risk

Article Excerpt

When choosing oil stocks to invest in, we recommend income-seeking investors stick with big integrated producers like Suncor Energy and Imperial Oil. Integrated producers have “upstream” oil and gas exploration and production assets, as well as “downstream” refining and marketing operations. Refineries transform crude oil into useful products such as petroleum naphtha, gasoline, diesel fuel, asphalt base, heating oil, kerosene, liquefied petroleum gas, jet fuel and fuel oils. Marketing involves distributing those products to customers, including gas stations. Imperial, Suncor and other integrated giants can profit even if oil prices fall. That’s because their downstream refineries achieve higher profit margins when they pay less for the crude oil they use as raw material. material…

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