- Congress has agreed to lift the 40-year-old ban on crude oil exports, but refiners are holding up well as the group wins a tax break on the cost of transporting oil as part of the deal.
- The tax provision meant to blunt potential damage to domestic refiners of allowing unfettered crude exports would allow non-integrated refiners to count 75% of their oil transportation costs toward an existing manufacturing tax deduction.
- Refiners are "positioned to succeed regardless,” says Carl Larry, head of oil and gas for Frost & Sullivan. “They can still make products cheaper than anywhere in the world... Regardless of whether the U.S. exports crude, they’ll be ahead of the game.”
- Wells Fargo contends that lifting the ban will have only a minimal impact in the short term, and notes that Phillips 66 (PSX +1.6%) has indicated lifting the move would have no material impact at least for one year; Valero Energy (VLO +1.2%) is better positioned than most because it already relies on a larger percentage of foreign oil for its feedstock to make gasoline and other petroleum products, says Simmons analyst Jeff Dietert.
- Also: TSO +2.5%, MPC +0.9%, HFC +2.4%, PBF +1.6%, WNR +4.9%, NTI +1.6%, ALJ +1%, CLMT -2.2%.
- Earlier: Solar stocks soar as Congress proposes extending solar/wind tax credits