Aug. 6, 2015, 2:59 PM
- Tesoro (TSO +3.3%) CEO Greg Goff says oil drilling in Utah's Uinta Basin has "dried up" because of low crude prices, and will affect availability of the waxy crude prevalent there after the refiner recently finished a $275M conversion project at its 57.5K bbl/day refinery in Salt Lake City to double waxy crude processing capacity to 22K bbl/day.
- Uinta trades at a discount to the WTI as it is more costly to produce and process; the discount narrowed as domestic crude prices plunged 58% Y/Y, prompting producers to pull back and focus on other more profitable oilfields.
- HollyFrontier (HFC +2.6%) also is set to start a similar conversion project at its Woods Cross refinery in Utah that will increase capacity to 45K bbl/day from 31K, with the ability to process up to 25K bbl/day of Uinta waxy crude.
- On today's earnings conference call, Goff declined to comment about talks reportedly held earlier this year to buy HFC, but said TSO fully intends to examine possible acquisitions from the midwest to the west coast, "pretty much staying out of the Gulf coast."
Aug. 5, 2015, 5:02 PM
- Tesoro (NYSE:TSO): Q2 EPS of $4.62 beats by $0.60.
- Revenue of $8.2B (-26.1% Y/Y) beats by $1.4B.
- Shares +2.9% AH.
Jul. 30, 2015, 11:16 AM
- HollyFrontier (HFC +4.4%) is higher following a Reuters report that Tesoro (TSO -2.5%) approached the company about a potential buyout but talks were not successful.
- The companies held discussions in this year's Q1 but were scuttled after HFC's board balked at TSO's proposed offer, which is not known, and other terms, according to the report.
- TSO is said to remain interested in a deal for HFC, which would provide access to the Rocky Mountain region, where refiners have seen margins rise as they have access to crude that can be difficult to transport to traditional refining centers on the Gulf coast.
Jul. 8, 2015, 3:49 PM
- The U.S. E&P industry is "between a rock and a hard place" entering earnings season, Deutsche Bank says, expecting continued headwinds for the group; while momentum has been building for moderate acceleration in activity levels in H2, macro concerns from China to Greece have weighed on crude prices and introduced an “additional layer of uncertainty.”
- Among the major integrated oils, the firm prefers EOG Resources (EOG -2.5%) and Anadarko Petroleum (APC -2.8%) into Q2 results but cuts its stock price target for Marathon Petroleum (MPC -2.6%) in half to $62.
- U.S. refiners, on the other hand, continue to defy fears of a collapse in margins, with demand strength and robust gasoline cracks again driving upside to earnings estimates; the firm sees 7% upside on average to current Q2 estimates for the group, with particular strength from Tesoro (TSO -1.2%), Valero (VLO -0.9%) and HollyFrontier (HFC -1.4%).
May 29, 2015, 11:15 AM
- Ethanol companies rise while refiners are off session highs after the EPA announces its renewables fuels mandate.
- The EPA proposes requiring 15.93B gallons of total renewable fuel in 2014, 16.3B gallons in 2015, and 17.4B gallons in 2016, but the proposal for the total renewable fuel requirement falls short of levels Congress mandated, which were 20.5B gallons in 2015 and 22.5B gallons in 2016.
- Also, the EPA cuts 2016 corn-ethanol quota to 14B gallons; U.S. law required 15B gallons of ethanol for 2016.
- Ethanol exposed companies are mostly higher: ADM +0.7%, GPRE +4.2%, PEIX +4.1%, REX +1%, DAR +2%, CZZ -2.2%.
- Among refiners: HFC +0.3%, TSO +1.3%, VLO +0.8%, WNR +1.9%, PBF -1%.
- Biofuel related stocks: GEVO -8.3%, SZYM -2.7%, CDTI -1%, REGI -0.7%.
Mar. 18, 2015, 3:24 PM
- Crude oil prices, in the doldrums yet again after U.S. inventories hit record highs for a 10th week and supplies at the futures' Cushing delivery hub hit a peak, turned around to finish higher following the Fed policy statement.
- Nymex crude rose 2.5% to settle at $44.66/bbl, pushing off earlier lows of $42.25 and the lowest intraday level since March 2009; Brent is up 4.5% at nearly $56.
- The gain could prove only a momentary recovery, however, as "speculation is going to grow about operational capacity being hit in Cushing and what that portends for prices,” according to Again Capital John Kilduff, adding that he sees U.S.crude testing $40 soon.
- U.S. refiners are enjoying big gains as the Brent/WTI spread surpasses $11: TSO +5.1%, CLMT +4.7%, CVI +4.8%, HFC +4.6%, MUR +4.5%, WNR +4.4%, VLO +3.9%, RDS.A +3.9%, CVRR +3.7%, MPC +3.3%, PSX +3.2%, ALJ +3.2%.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
Feb. 13, 2015, 11:18 AM
- All oil refiners are not the same, Goldman Sachs suggests as it upgrades Valero Energy (VLO +4%) to Buy from Neutral and adds it to the firm's Conviction Buy List while downgrading Tesoro (TSO -0.4%) to Neutral from Buy and removing it from the conviction list.
- Goldman thinks VLO offers investors a compelling turnaround story - similar to TSO in 2014 - with a clear, new strategy to reduce growth capex and return capital to shareholders; VLO also has not been impacted by USW strikes, unlike TSO.
- The firm also expect VLO to be as aggressive as any refiner in dropping down assets to its underlying Valero Energy Partners (NYSE:VLP) MLP, and feels the market generally has underappreciated this potential upside.
Dec. 10, 2014, 2:49 PM
- Tesoro (TSO -3.5%) moves lower along with nearly all energy names, despite receiving analyst praise following its update of growth strategies including expectations for 2015 annual improvements of $550M-$670M.
- Barclays analysts say TSO is on track to exceed original 2014 improvement targets, reiterating its Overweight rating and raising its price target to $114 from $104.
- Credit Suisse reiterates an Outperform rating and lifts its price target to $100 from $86, saying that "self-help" is driving upside.
- BofA calls TSO a Buy and raises its price target to $88 from $70, noting that TSO's review combined for the first time the strategy update from Tesoro Logistics (TLLP -6.2%).
Dec. 3, 2014, 10:48 AM
- QEP Resources (QEP +4.3%) moves sharply higher after saying it completed the $2.5B sale of its natural gas gathering and processing business, including 2K miles of pipelines and four processing complexes, to Tesoro Logistics (TLLP +3.8%).
- QEP says it has now repaid a $600M term loan and all of its debt under its revolving credit line, and has expanded its credit line to $1.8B.
- Adding $2.5B to the balance sheet could allow QEP to boost dividends five-fold and still maintain enough cash to make both acquisitions and capex as needed to maintain market share, 24/7's Paul Ausick writes.
Nov. 28, 2014, 7:48 AM
- The oil market will need to balance via slower U.S. shale growth and OPEC cuts at some later date (their next meeting is on June 5), says Goldman's Brian Singer, maintaining his team's WTI oil price outlook of $70-$75 per barrel for next year.
- Among the energy sub-sectors, refiners and pipelines continue as favorites, and five of Goldman's eleven energy and utilities stocks on the Americas Conviction Buy list are from midstream/refining: KMI, MWE, PAGP, TRGP, TSO (all are lower premarket on oil's tumble).
- Not buyers of oil services and E&P names, Goldman nevertheless does have favorites in these areas: CRR, BAS, RIG.
Oct. 31, 2014, 3:17 PM
- Tesoro (TSO +5.4%) jumps more than 5% after the oil refiner reported Q3 earnings that easily beat expectations on better than expected refining margins, higher than estimated refining throughput, and record retail performance.
- Cowen raises its TSO target price to $90, saying the company's refining segment outperformed in all regions with throughputs 60K bbl/day higher than it estimated, and the retail segment beat operating income estimates by $100M on margins 100% higher than anticipated.
- Shares are upgraded to Outperform at Howard Weil, which cites California synergies and YTD business improvements of $390M, on pace to exceed FY 2014 guidance of $370M-$430M.
Oct. 9, 2014, 2:57 PM
- J.P. Morgan has a favorable outlook on the refining sector heading into Q3 earnings, as the group has sold off since September on a combination of factors, including fears about the crude export ban being lifted and narrowing crude differentials, despite good product cracks.
- Two of the biggest drops among refiners have been suffered by Valero Energy (VLO -2.7%) and HollyFrontier (HFC -2.6%), each ~13% since the group's peak; of the two, JPM likes VLO going into the quarter, particularly in the event of any favorable updates around capital allocation.
- The firm thinks Tesoro (TSO -3.2%) is set up for another solid quarter but that investors must be expecting it, given that shares are down only ~3%.
Sep. 10, 2014, 3:28 PM
- Energy stocks, especially refiners, are taking a beating following the latest EIA inventory report that said gasoline stockpiles rose by 2.4M barrels last week, helping send U.S. crude oil futures to 16-month lows (-1.2% to $91.61/bbl) and Brent crude to 17-month lows (-1.1% to $98.02).
- The report is bearish given the large increases in refined product inventories; "even though the crude drawdown was close to expectations, it seemed to disappoint," Again Capital's John Kilduff says.
- The EIA report followed the agency’s updated demand growth report issued yesterday and this morning’s release of OPEC’s report on the oil market; both see lower demand growth this year and next.
- Oil majors are mostly lower: XOM -0.6%, CVX -1.4%, COP -0.3%, but BP (+2.9%) and RDS.A (+1%) are higher.
- Refiners are hit hard: VLO -3.6%, PSX -1.5%, MPC -1.9%, HFC -2.5%, TSO -2.9%, WNR -4.1%, CVI -1.6%, ALJ -1.8%, PBF -3.5%, DK -1.8%, CLMT -1.8%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, UGA, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, PXI, PXJ, DBE, FENY, UWTI, DWTI, DNO, RJN, RYE, FXN, SZO, OLO, JJE, DDG, ONG, RGRE, OLEM, TWTI, UBN
Jul. 28, 2014, 12:40 PM
- Refiner stocks are dropping, in line with the margin squeeze that could result from the drop in crude oil prices, Barron's Dimitra DeFotis writes.
- Rising violence in Libya continues to affect energy assets, but attempts for peace between Israel and the Palestinians over the weekend may be taking some of the risk out of energy markets; Brent prices are down nearly 1% to $107.76/bbl, narrowing the spread with West Texas crude, off 0.3% to $101.74.
- ALJ -3.3%, TSO -1.6%, WNR -0.9%, HFC -0.8%, VLO -0.6%, PSX -0.4%, MPC -0.2%.
Jun. 26, 2014, 3:33 PM
- Most refiners recover part of yesterday's big drop, which some say was an overreaction to the U.S. government move to allow two oil companies to export ultra-light crude oil for the first time: TSO +2.8%, VLO +2%, PSX +1%, CVI +0.7%, CLMT +0.7%, WNR +0.6%, MPC +0.2%, ALJ -1%, PBF -0.6%, HFC -0.3%.
- The death of U.S. refiners is "greatly exaggerated," Cowen analysts say: "The spirit of the law - that hydrocarbon liquids produced in the U.S. must be processed in the U.S. - remains in place, and permits for condensate exports do not constitute precedent for crude oil... We continue to see potential for a meaningful feedstock advantage for U.S. refiners emerging later in 2014."
- Ned Davis Research, however, thinks the news is "potentially game changing for refiners," since it signals a change in the government’s position on oil exports more broadly and noting that it is the export ban, plus inadequate pipeline infrastructure, that has fed recent refiner outperformance.
Jun. 25, 2014, 10:18 AM
- Refiners take a beating in early trading, as a lift of the ban on U.S. oil exports is expected to narrow the WTI-Brent spread, which could cause refiners' profits drop if they are forced to pay higher prices to compete with international buyers for U.S. crude.
- “We don’t think the current system needs to be changed,” Valero Energy tells Bloomberg.
- Yesterday's rulings gave Pioneer Natural Resources (PXD +2.6%) and Enterprise Products Partners (EPD +1.4%) permission to ship ultralight oil to foreign buyers - a narrow ruling, but one that is likely to spark similar requests from other companies, and increase lobbying for a full lifting of the 40-year-old ban on exporting crude oil.
- Refining stocks are broadly lower: VLO -7.4%, PBF -5.8%, MPC -5.7%, WNR -5.5%, DK -5.4%, HFC -4.6%, ALDW -4.6%, TSO -3.8%, NTI -3.5%, PSX -2.9%, ALJ -2.7%, CVI -2.3%.
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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