Sharky:

The beauty of the hedge positon, is that as oil prices decline the margin of refiners increase on both a real and relative scale. As prices for oil escalate, the refining margins typically deteriorate due to added input costs and margins on oil producton increase. However, without the hedge position, it is possible to have margins squeezed on both ends. When one considers that with the hedge one has more control over their profit destiny, this can become critical as opposed to leaving oneself at the whims of their suppliers.

Brian