After seeing sustained losses for much of late 2008, and 2009, the refining sector is finally recovering. While margins have been acceptable since last autumn, the recent fall in crude prices has also been a boon for beat up refiners.

In a sign of strength, Valero successfully sold its closed Delaware City refinery to a group of investors. The facility last had an operating capacity of 211,100 barrels per day. Since the plant has seen significant downtime and needs to be updated, the buyer, PBF Investments said it may be April, 2011, before the plant is at capacity.

Meanwhile, Valero announced today that it has planned to re-open a refinery in Aruba which exports products to the United States and Europe. While it will take time to update the plant (Valero indicates roughly 90-days), the added capacity and production of gasoline can only help keep a lid on gasoline prices in the United States. The Valero plant has been idled nearly two years after it was shut during the Summer of 2009 because of poor margins.

As prices of oil have fallen, so have gasoline prices, keeping margins for refineries healthy. Had gasoline prices fallen without crude prices falling, it would have decreased refinery margins. When the opposite occurs, falling crude prices and rising gasoline prices, is when refineries benefit the most. Today, the "crack spread", or the amount of money a refinery makes from "cracking" oil into gasoline, diesel, and other products averages near $11.50 per barrel. Typically, margins on the West Coast are higher and margins in the Gulf and East Coast are lower.

One of the largest expansions currently under construction is at BP's refinery in Whiting, Indiana. BP Officials say that permits for the project are being reviewed by federal officials won't alter the construction timeline for the project. The construction and upgrades have led to the hiring or thousands of workers for the project, which is planned to be complete sometime in 2012.

Bottom line for motorists that as long as crude prices fall and gasoline prices fall or remain stable, refineries will continue to see healthy margins, which will mean more refineries opening and more upgrades, leading to more jobs.