When I learned about the business operations of refining companies a decade ago, I became a fan of the sector and the long-term profit rewards that investors can earn from it.
The energy sector is divided into three subsectors. Upstream energy companies drill for oil and gas. Midstream is the transportation and storage of energy commodities. Downstream energy encompasses the companies that refine crude oil, natural gas, and NGLs into final-use products, as well as the marketing of these products.
Large-cap energy stocks, such as ExxonMobil (XOM) and Chevron (CVX), operate in all three sectors. Smaller energy companies are typically focused on a single sector.
This post originally appeared at Investors Alley.