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Refiners are cut throat investments. They are one of the most cyclical industries and are prone to frustrate even the most patient investors. Instead of owning them for the long haul, refiners should be position traded to exploit seasonality, which is why I put together my wish list around this time each year.

Refining is a traditional supply demand industry. Over the past thirty years, supply has exceeded demand, with capacity utilization fluctuating around 90%. But, during spring, maintenance season curbs capacity, providing price support. This support lingers as capacity returns into the summer grade switchover - rewarding shareholders.

So far this quarter, Gulf Coast refining margins are best. The BP Refiner Marker Margin is at $11.88 per barrel in Q1, up from $10.81 last year and $7.16 in Q4. West coast and Midwest margins are trailing last year, however are also up from Q4. While last quarter was challenging for many refiners, margins are improving as expected.

Those refiners with the best history of rewarding shareholders over the three month period ending April 30th include Murphy Oil (NYSE:MUR), Sasol Ltd (NYSE:SSL), Hess Corp (NYSE:HES) and Marathon Oil (NYSE:MRO). All four have posted gains in either four or five of the last five years through April, with Murphy and Sasol providing double digit average returns.

Symbol INDUSTRY Profit- Feb-Apr Feb-Apr Feb-Apr Feb-Apr Feb-Apr Feb-Apr
(of 5) 2007 2008 2009 2010 2011 Average
MUR OIL & GAS REFINING & MARKETING 5 11.86% 23.37% 8.59% 18.33% 17.33% 15.90%
SSL OIL & GAS REFINING & MARKETING 5 1.60% 18.84% 14.31% 12.05% 19.31% 13.22%
HES OIL & GAS REFINING & MARKETING 4 5.32% 17.30% -1.31% 10.13% 2.31% 6.75%
MRO OIL & GAS REFINING & MARKETING 4 12.89% -2.72% 10.04% 8.74% 18.90% 9.57%
Source: Time To Get Cracking With Refiners