Forget about playing the commodities markets, and about the companies that make money discovering and extracting raw materials, including oil and natural gas. As gasoline prices rise, the place to invest is in the shares of the refiners that generate profits by buying crude oil and then transforming it into gasoline, jet fuel and other crude byproducts. The difference between is the refining margin – and that has been climbing steadily, fueled in part by some oddities in the nature of regional crude oil markets and oil pipeline transportation networks.

For instance, HollyFrontier Corp. (HFC), formed by the recent merger of Holly Corp. and Frontier Oil Corp., operates several refineries in the Midwestern United States, plus Wyoming and Oklahoma. That’s a region in which exploration and production companies have been very active, drilling not only in the established Permian Basin but also extracting a lot of new oil from the Bakken Shield. But as supplies have climbed, prices have fallen, not only because demand hasn’t soared commensurately, but because the existing transportation infrastructure hasn’t expanded along with output. That has left a lot of crude oil “trapped” in the production region, and created a differential between the West Texas Intermediate (WTI) price that is determined by the supply/demand balance in Texas, and the global Brent price, which has been hovering around $21 per barrel.

That’s a recipe for hefty profit margin gains at HollyFrontier and other refining companies able to buy their feedstocks at the WTI price in order to resell the fuels they produce at prices pegged to Brent.

Of course, this is hardly secret. The refining companies and analysts that follow the energy industry have been monitoring this trend for a few years. The question today is whether this pattern seems to remain intact, and whether there is enough value left in these stocks to warrant jumping in or adding to positions at this point in the game. The stock price of Tesoro Corp. (TSO) has more than doubled over the last 12 months, while that of Valero Energy (VLO) has climbed 87%. But HollyFrontier has gained a relatively meager 68%, in spite of the fact that its rate of growth in net income has dwarfed that of Tesoro, for instance. Moreover, as the chart below shows, it’s easily the cheapest of the three stocks.

There’s a reason for that. While HollyFrontier’s earnings soared 75% in the fourth quarter to $1.92 a share, analysts had been looking for a figure closer to $2.26 a share. The problem? The company’s refineries are older, and downtime and higher costs ate into some of the rising margins that HollyFrontier captured. Some of the company’s refineries had to take downtime – both scheduled and unscheduled – and more may be in the offing, some analysts fear. The result? HollyFrontier has lagged at least two of its peers, Valero and Tesoro.