Believe it or not, the business of buying crude oil and "cracking" it into gasoline, diesel, jet fuel and heating oil is losing money. It really is hard to believe, considering that everything this industry sells fetches 50% more than it did a year ago.

But just like bakers who are staggering from the rising cost of flour or ice cream makers who are paying through the snout for milk and cream, refiners are squeezed by the rising cost of crude, whose price is rising much faster than the price of gasoline.

Refiners' gross margins will be slim and company earnings nonexistent until their biggest expense, crude oil, starts falling.