By Matt Badiali in Growth Stock Wire:

The big refiners aren't making money on gasoline right now. The "crack spread" is historically narrow.

The crack spread is the profit margin (expressed as a percent) refiners can collect on the products they make. Essentially, it's the difference between the cost of a barrel of oil and the price of the products that oil becomes.

…The crack spread ebbs and flows, but at 13%, it's low these days. Gasoline might be matching crude oil's rise, but the prices of diesel, jet fuel, and heating oil haven't gone up nearly as fast.

And thanks to the low margins, refining stocks didn't budge when practically the entire oil industry rose double digits. Valero gained 2% from March 1 to today. In that same time, the Dow Jones U.S. Oil & Gas Index (a composite of 100 oil-industry companies) is up 35%.

The last time the crack spread was this low, from August 2007 to August 2008, the five largest independent refiners lost $32 billion in market value. Shares of the largest independent refiner, Valero, fell 44%.

But once crack spreads start to tick up, refiners can be lucrative trades. In 2004, the crack spread went from 11% to 27% in three months, and Valero shares shot up 80%. In 2005, a move from 8% to 32% in the crack spread drove Valero shares up 40% in two months.

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