Tue, Jul. 19, 9:57 AM
- Tesoro (TSO +0.3%) is upgraded to Buy from Neutral with a $92 price target at Citigroup following the recent pullback in the stock.
- Citi's Faisel Khan cautions that despite the growth in crack spreads, material headwinds remain for refiners due to higher RIN costs and increased gasoline inventories, but also notes that TSO obtains a meaningful part of its cash flows from its marketing and midstream assets, and that the value of these assets has “held up better than pure refining assets.”
- For Q2, Khan expects TSO to report a Q/Q improvement in margins, although significantly below prior estimates.
Mon, Jul. 18, 2:19 PM
- Tesoro (TSO +1.8%) says it has reached a $400M-plus settlement with the U.S. Department of Justice and EPA for air quality violations at refineries in six western states.
- Under the settlement, TSO pledges to invest $400M in technology to better control air emissions at operations in Alaska, northern California, North Dakota, Utah, Hawaii and Washington, as well as pay a $10.4M civil penalty.
- The U.S. attorney general, EPA administrator, attorneys general for Alaska and Hawaii, and the Northwest Clean Air Agency had filed a complaint against TSO for Clean Air Act violations.
Fri, Jul. 15, 5:56 PM
- California proposes a series of regulations aimed at strengthening workplace and environmental safety at the state’s 18 oil refineries, four years after a leaky pipe triggered a fire at Chevron’s (NYSE:CVX) Richmond plant and sent 15K people to the hospital.
- The new rules would require increased employer accountability for mechanical integrity of refinery equipment, adoption of inherently safer designs and systems, periodic workplace safety culture assessments, and more.
- CVX has acknowledged problems at Richmond and agreed to pay $2M in fines but rejected accusations of lax safety attitudes at the plant.
- Other relevant tickers include TSO, VLO, PSX, ALJ, RDS.A, RDS.B.
Fri, Jul. 15, 10:10 AM
- Wells Fargo ticks off 20 S&P 500 stocks with the most upside potential vs. consensus, and the 20 with the most downside risk vs. consensus.
- The list is compiled by comparing the midpoint of Wells Fargo Securities valuation ranges to consensus fair value estimates, volatility adjusting the percentage difference, and ranking the resulting score.
- Upside: AEE, BEN, CCL, DVA, EIX, ES, EXC, FTR, HUM, INTC, JNJ, LNT, PEG, PNW, SCG, T, WEC, WU, XEL, XOM.
- Downside: ANTM, C, CI, COF, EQT, FOXA, FSLR, GS, KIM, LH, MON, MSI, MYL, NVDA, NWSA, SLG, TIF, TSO, UA, WLTW.
Wed, Jul. 13, 3:56 PM
- Phillips 66 (PSX -0.2%) is downgraded to Equal Weight from Overweight with an $86 price target, lowered from $93, at Barclays, which sees limited upside especially if refining margins rebound and offer greater valuation growth potential to its large-cap peers, including Tesoro (TSO -2.6%), Valero (VLO +0.4%) and Marathon Petroleum (MPC -1.6%).
- Barclays also downgrades Delek US Holdings (DK -4.7%) to Equal Weight from Overweight with a $15 price target, cut from $20, on valuation and continuously challenged margin capture at both DK refineries, neither of which show visibility toward material improvement.
- Meanwhile, the firm upgrades Alon USA (ALJ +0.1%) to Equal Weight from Underweight after the company has significantly underperformed since the end of 2012.
Mon, Jul. 11, 6:25 PM
- Tesoro (NYSE:TSO) CEO Gregory Goff said at an industry conference today that he supports the lifting of the U.S. oil export ban, saying it actually is in the best interest for the refining industry.
- "We believe a healthy free market economy is the way to address things," Goff said. "Based upon that, we felt was in the best interest to lift the ban to allow the economy to move forward. Crude oil is sold and priced around the world and is very transparent."
- The ban's removal was good news for U.S. producers as it opened up additional markets, but refiners such as Valero Energy were some of the biggest advocates for keeping the ban.
- Goff also said he does not object to advances in renewable energy as long as a strong business case could be made, but he criticized out the Obama administration for supporting overreaching regulations.
Wed, Jul. 6, 2:12 PM
Thu, Jun. 30, 12:47 PM
- Exxon Mobil (XOM +0.8%), Chevron (CVX +1.2%) and Tesoro (TSO -0.5%) are among refiners being investigated by California's attorney general over allegations they withheld supply in an attempt to artificially raise gasoline prices in the state, WSJ reports.
- The subpoenas were sent in late May and seek information about trading, maintenance and repair activities at the companies since 2014, according to the report.
- Other companies receiving subpoenas reportedly also included Phillips 66 (PSX -0.9%), Valero (VLO -2.1%) and Royal Dutch Shell (RDS.A, RDS.B).
- "Many factors that determine the price of gasoline," a TSO spokesperson says, including "the cost of crude oil, distribution and marketing costs, refining costs and federal and state taxes. Market conditions, such as supply and demand, determine the price that consumers pay at the pump.”
Wed, Jun. 29, 3:58 PM
- Tesoro (TSO +1.9%) is upgraded to Buy from Neutral with a $100 price target, lifted from $96, at Goldman Sachs, citing a more constructive outlook for the California refining market, underappreciated value in non-refining assets, and limited risk from higher RINs and a lower Brent-WTI spread.
- Goldman thinks the California refining market will remain well-balanced, despite Torrance returning to service, driven by growing regional demand and the currently low inventories, and that investors have not been giving TSO fair value for its non-refining businesses.
- At the same time, the firm downgrades PBF Energy (PBF +1.2%) to Neutral from Buy with a $26 price target, cut from $37, expecting the company to be “disproportionately negatively impacted” by expectations of higher RINs prices.
- Along with TSO, Goldman rates Valero (VLO +0.1%) and Marathon Petroleum (MPC +4%) as Buys among refiners, while maintaining Sell ratings on Phillips 66 (PSX +1.2%), HollyFrontier (HFC +0.1%), CVR Energy (CVI -0.4%) and CVR Refining (CVRR -1%).
Tue, Jun. 28, 8:27 AM
- Calumet Specialty Products Partners (NASDAQ:CLMT) sells its 50% equity interest in the Dakota Prairie Refining joint venture to MDU Resources Group (NYSE:MDU), which then sells the entire JV to Tesoro (NYSE:TSO).
- TSO winds up acquiring Dakota Prairie Refining in exchange for the continued servicing of DPR's $66M term loan debt and ~$10M towards working capital.
- DPR's refinery has a crude oil capacity of 20K bbl/day and produces ultra-low sulfur diesel, naphtha and resid; TSO says it will continue to market the ultra-low sulfur diesel to local customers and utilize the naphtha and resid in its integrated value chain system.
Wed, Jun. 22, 11:43 AM
- Southern California refiners are bracing for potential disruptions ahead of possible blackouts this summer as state regulators to warn of power and gas shortages.
- On top of a heat wave that has swept the region, testing power grids that rely heavily on natural gas for fuel, power generators face strained gas supplies as SoCalGas' Aliso Canyon facility remains out of commission following last year's huge gas leak.
- Any stoppages at the refineries likely would cause gasoline prices to rise in California, already the largest and most expensive gasoline market in the continental U.S.
- Tesoro (TSO +0.1%), which operates two refineries in the region, says the Watson cogeneration facility at its Los Angeles refinery utilizes natural gas to produce steam to operate the refinery.
- Exxon Mobil (XOM -0.2%), Chevron (CVX -0.4%), Valero Energy (VLO +1.1%) and Phillips 66 (PSX +0.9%) also operate southern California refineries.
Mon, Jun. 20, 12:30 PM
Wed, Jun. 15, 10:58 AM
- Tesoro (TSO +1.3%) is downgraded to Neutral from Outperform at Credit Suisse, which says the company's West Coast margins have underperformed despite strong vehicle miles traveled while the mid-con business faces narrower crude advantages.
- "We and others have been talking about earnings shortfalls since March but the net result has been an earnings downgrade cycle all year. Our Q2 forecasts had been below consensus but now seem too high," Credit Suisse says.
- The firm says TSO's annual EBITDA might drop 30% in the current year from 2015 as oil demand has risen by some 1.5M bbl/day.
Wed, Jun. 8, 6:39 PM
- Gasoline profit margins have fallen to their narrowest seasonal levels since 2010, dropping by $5/bbl in slightly more than two weeks, as high imports have kept U.S. inventories elevated even as gasoline demand rises.
- The decline was not stemmed by yesterday’s EIA projection that summer gasoline demand will rise to a record 9.5M bbl/day, as gasoline imports into the U.S. east coast, which primarily come from refineries in eastern Canada and Europe, have kept U.S. inventories at the highest levels in at least 20 years.
- "We’re seeing the economics change to the point that many refiners along the coast are looking at maximizing jet fuel and diesel at the expense of gasoline," analyst Andy Lipow tells Bloomberg.
- The falling margins are hurting refiners, with Bloomberg's North America Refining & Marketing index down 28% Y/Y; in today's trade, WNR -3.1%, HFC -2.7%, CVRR -2.2%, VLO -2.2%, TSO -2%, NTI -0.8%, ALJ -0.8%.
Mon, Jun. 6, 10:26 AM
- Union Pacific (UNP -0.3%) says it is resuming service immediately to the area in Oregon where Friday's oil train derailment sparked a fire that prompted the evacuation of some residents from the city of Mosier.
- UNP says the cars filled with oil have been moved off to the side of the tracks, and as a precaution operating trains will pass through the area at speeds of only 10 mph; the company says some kind of track failure likely was the cause of the derailment.
- While rail shipments have dropped from more than 1M bbl/day in 2014 because of weaker oil prices, the first such crash in a year may reignite the debate over safety concerns surrounding transporting crude by rail.
- The director of the Columbia Riverkeeper advocacy group says the crash should raise concerns about Tesoro's (TSO -1%) proposed 360K bbl/day railport in Vancouver, Wash., which would be the largest in the U.S.
- Officials from Washington state say there is no sign of oil in the Columbia River or Rock Creek.
Thu, May 19, 6:48 PM
- Oil refiners are returning to normal after a period of high differentials, and are thus no longer a safe place for investors to wait out the energy downturn, UBS analysts say.
- UBS believe refiners have reached an inflection point where headwinds outnumber tailwinds, likely driving refining margins to more normal levels; the firm expects a rising crude price to eventually compress refining margins that were supported by wide basis differentials that have now narrowed.
- UBS initiates Tesoro (NYSE:TSO) with a Buy rating, as it expects TSO to derive more of its EBITDA from retail and marketing vs. refining by 2018 than comparable peers under coverage.
- However, the firm starts Marathon Petroleum (NYSE:MPC) with a Sell rating; Phillips 66 (NYSE:PSX), Valero Energy (NYSE:VLO) and CVR Refining (NYSE:CVRR) are rated Neutral.
Tesoro Corp. engages in the refining and marketing of petroleum products. It operates through three segments: Refining, TLLP and Retail. The Refining segment sells refined products to unbranded marketers and opportunistically exports refined products to foreign markets. The TLLP segment owns,... More
Sector: Basic Materials
Industry: Oil & Gas Refining & Marketing
Country: United States
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