Top 3 Energy Stock Plays Based on Rising Oil Prices

The Dow Jones Industrial Average, NASDAQ, and S&P 500 have all managed to remain resilient despite the

in the commodities market. Fortunately, even steadily rising crude oil prices have been unable to temper this economic rally. The bad news? Things may be changing for the worse since oil prices crossed over $112 a barrel this past week. The nationwide average for regular gasoline has hit $3.76 per gallon. Another 10%

and they will reach a new all time high. While this is another shot in the gut for consumers, it can also be an excellent opportunity for investors, if you know where to put your money. Here are a few companies that you can invest in to benefit from the rise in oil.

Valero is the largest independent refiner, and they have some of the best refining margins in the entire industry. Valero's stock has more than doubled since the rise in crude oil over the past year. That leap in stock price may make it seem as though the stock is now fully valued - until you investigate further. At $30 a share, the

signifies that the stock still trades at only 10 times earnings, and 9 times next year's earnings. Valero has the potential to outperform as the company's earnings should be stronger than the $2.83 per share estimate that Wall Street is expecting. Whenever oil prices are high, as they are currently, refiners like Valero benefit heavily from crude oil spreads. Earnings have increased a remarkable 74% this year and could continue their bullish rise as long as tensions continue in the Middle East.

Tesoro is another way for investors to play the refining space. The company derives 100% of its revenue from the refining and marketing of petroleum products, with oil refining accounting for 80% of its operations. Tesoro may not produce the same massive margins of Valero, but the stock is actually cheaper based on its potential earnings growth. Tesoro is a riskier play that has more potential to disappoint, but it's worth taking a shot on since its growth is pegged at over 800% for the current year. The stock has been on a run since last fall and this upward momentum should continue.

Though not an industry darling like Exxon

and Shell, Hess is a stock that has solid upside potential. Shares of Hess currently trade at 11 times this year's earnings and 10 times next year's earnings. That places the shares right in line with the projected growth rate just shy of 10%. Since oil accounts for 70% of the company's production efforts, the stock should thrive while crude oil prices are high. This differentiates Hess from competitors that have natural gas production accounting for a larger portion of their businesses. Hess also has a number of attractive overseas properties that the company is just starting to tap into as new production sources for energy. The company should be able to increase production and lower costs once these new oil sources are fully operational.

As you can see, higher gas prices do not have to spell doom for everyone. Your

might as well earn you some income while you are being forced to pay more at the pump. What are your thoughts on benefiting from rising oil prices?