Valero Energy CorporationNYSE
Tue, Nov. 29, 1:48 PM
- Long-time ethanol critic Valero Energy (VLO +0.2%) has joined the Renewable Fuels Association, one of the industry’s biggest trade groups, which Bloomberg says shows how even reluctant fuel producers are positioning themselves to take advantage of growing demand.
- VLO historically has opposed the Renewable Fuel Standard, the U.S. law that forces refiners to use increased amounts of ethanol and biodiesel; in response to the EPA’s new quotas issued last week, VLO said the agency “missed an important opportunity to fix the implementation” of the program.
- “They still want to see a change in the RFS,” the Renewable Fuels Association says of VLO, but "we think it’s a signal that the industry’s coming together."
Wed, Nov. 23, 7:47 PM
- The EPA today issued final regulations requiring that the amount of ethanol and other biofuels that must be blended into the U.S. fuel supply must increase by 6% next year.
- Since the result is a significant gain over the 4% the EPA recommended in an earlier draft proposal, it is a victory for ethanol makers and a defeat for oil companies that say using more biofuels in gasoline and diesel is costly and unachievable.
- The EPA set the 2017 target for total renewable fuel use at 19.28B gallons, higher than the initial proposal for 18.8B gallons as well as this year's 18.1B gallon requirement; the new mandate includes 15B gallons for conventional biofuel, which is mostly corn-based ethanol, vs. 14.5B gallons last year.
- Tesoro (NYSE:TSO) exec Stephen Brown says the plan is "unworkable" as it forces the use of biofuels beyond the blend wall and that it highlights the need for a legislative overhaul of the program.
- Shares in oil refiners mostly fell in today's trade: TSO -1.4%, VLO -0.8%, HFC -1.8%, MPC -0.3%, WNR -2.2%, PBF -3.5%, PSX +0.2%.
- Shares of biofuels producers rose: GEVO +8.5%, PEIX +7.1%, GPRE +2.1%, REGI +2%, REX +0.8%.
Thu, Nov. 10, 5:48 PM
- The EPA says it will deny several petitions from oil groups to change the U.S. biofuels program, although it will open a 60-day public comment period.
- Valero Energy (NYSE:VLO), HollyFrontier (NYSE:HFC), Monroe Energy and the American Fuel and Petrochemical Manufacturers have petitioned the EPA to consider changing the rule to reduce the onus on refiners that have little capacity to blend biofuels at their operations.
- The change the refiners are requesting "would not address the challenges associated" with boosting availability of advanced fuels and getting more ethanol into the fuel system, the EPA says.
- Tesoro (NYSE:TSO) and Marathon Petroleum (NYSE:MPC), which have invested in biofuels blending capacity, say they support the EPA's move toward denying the change.
Wed, Nov. 9, 12:44 PM
- U.S. independent refiners are rallying as investors bet that a Trump administration will ease costly renewable fuel regulations.
- During the campaign, Trump unveiled an energy policy calling for the elimination of many regulations, including the system of buying and selling RINs, although Trump also has said he supports ethanol.
- RINs tracking ethanol use for 2016 have more than doubled in the past year, and RINs tracking biodiesel have jumped 59% Y/Y, according to Bloomberg data.
- In today's trade: CVI +22.5%, CVRR +15.4%, PBF +12.2%, HFC +11.7%, DK +6.1%, VLO +4.8%, WNR +4.4%, TSO +2.9%, MPC +2.8%, PSX +1.9%.
Sun, Nov. 6, 5:04 PM
Wed, Nov. 2, 5:44 PM
Wed, Nov. 2, 3:56 PM
- Oil prices and energy equities plunged sharply as the latest inventory data showed U.S. stockpiles posted the largest weekly surge in 34 years, after the consensus outlook had pointed to only a modest rise.
- WTI crude oil -2.9% to settle at $45.34/bbl, its lowest since Sept. 27, and Brent crude -2.7% to $46.86, also its lowest since late September.
- “You could easily make the argument it’s the most bearish report of all time,” says Bob Yawger, director of the futures division of Mizuho Securities USA. “There’s nothing to support the market.”
- WTI, which already was turning lower in recent days, has now fallen 12% in just two weeks since hitting a one-year high on Oct. 19 and marks the third retreat from $50/bbl toward $40 within five months.
- Among individual stocks: XOM -0.1%, CVX -0.9%, RDS.A -2%, BP -0.2%, TOT -2.4%, COP -0.6%, MRO -3.6%, HES -1.3%, PSX -2.3%, MPC -3.4%, VLO -1.9%, SLB -1%, HAL -0.5%.
- ETFs: USO, OIL, XLE, UWTI, UCO, VDE, ERX, DWTI, OIH, SCO, XOP, BNO, DBO, ERY, DIG, DTO, USL, DUG, BGR, IYE, IEO, FENY, DNO, PXE, FIF, OLO, PXJ, RYE, SZO, NDP, GUSH, DRIP, DDG, FXN, OLEM
Wed, Nov. 2, 1:20 PM
- This week’s Colonial Pipeline explosion and shutdown (I, II, III) looks like another weight for the refining sector which already is pressured by gasoline stockpiles that are holding on to historic highs for this time of year, with a glut left over from the summer, WSJ reports, and traders now expect supplies in the Gulf Coast and southwest to build up, stranded without a fully operational Colonial.
- Delek US (DK -3.9%) and Alona USA Energy (ALJ -7.3%) are the week's biggest losers so far, down ~10% in just two days, and Valero Energy (VLO -1.8%) and Marathon Petroleum (MPC -3.1%) also are sharply lower; the pervasive pessimism even drags down some that may benefit from Colonial’s problems, such as east coast refiner PBF Energy (PBF -2.4%), which has given back some of yesterday's gains.
- Refiners also continue to face rising costs for crude sold in later months and renewable fuel credits, as well as signs that the stabilization in gasoline prices has caused U.S. consumers to pull back on rapid demand growth.
Tue, Nov. 1, 7:59 AM
- The Colonial Pipeline, the largest fuel pipeline in the U.S., has been shut down for the second time in two months following a fatal explosion and fire in Alabama, bringing the likelihood of higher gasoline prices in the southeastern and mid-Atlantic regions of the U.S.
- Nymex gasoline for December delivery has spiked as much as 15% and its premium to crude shot up by 60% to as high as $18/bbl.
- The longer the mainlines are offline, “the more upward pressure will be placed on U.S. East Coast fuel prices, while downward pressure will be exerted on U.S. Gulf Coast product prices," says Robert Campbell, head of oil products research at Energy Aspects.
- Some major U.S. refiners are higher in premarket trading as the premium jumped, including Phillips 66 (NYSE:PSX) - which operates a refinery near New York City - Valero Energy (NYSE:VLO) and Marathon Petroleum (NYSE:MPC).
- Colonial Pipeline is owned by Koch Industries, South Korea’s National Pension Service, Royal Dutch Shell (RDS.A, RDS.B) and others.
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, UGA, USL, DNO, OLO, SZO, OLEM
Tue, Oct. 25, 8:58 AM
- Valero Energy (NYSE:VLO) +2.4% premarket after Q3 earnings and revenues easily beat analyst expectations, helped by cost cuts.
- VLO says Q3 costs and expenses fell 8% Y/Y, or ~$2B, to $18.75B, helping offset shrinking margins due to higher gasoline inventories and rising costs of biofuel blending obligations.
- Q3 biofuel blending costs more than doubled to $198M, but the company backs its full-year cost estimate for blending biofuels at $750M-$850M.
- VLO's refineries operated at 95% throughput capacity utilization in Q3, vs. 96% in Q2; refining throughput margin fell to $9.07/bbl, from $14.38/bbl a year ago.
- VLO also trimmed its 2016 capex forecast by $200M to ~$2.4B.
- VLO says it achieved its stated dropdown target for 2016 with the sale of the previously announced Meraux and Three Rivers terminal services business.
Tue, Oct. 25, 7:12 AM
Mon, Oct. 24, 5:30 PM
- ABG, AGR, AKS, ASTE, ATI, AXE, BAX, BHI, BPOP, CAT, CIT, CNC, CPLA, CTG, CVLT, CYNO, DD, EAT, EDU, ETR, FBC, FBP, FCAU, FCX, FELE, GBX, GLW, GM, GPK, HUBB, IIVI, JBLU, JNS, KEY, KKR, LLY, LMT, LPT, MAS, MDSO, MINI, MMC, MMM, MRK, NCI, NLSN, NVS, PCAR, PG, PII, PNR, R, RTIX, S, SAVE, SCHN, SERV, SHW, SIR, ST, STAY, TNC, UA, USG, UTX, VLO, WAB, WAT, WDR, WHR, WSO
Fri, Oct. 21, 8:20 PM
- Saudi Aramco has bid $1.5B for LyondellBasell's (NYSE:LYB) refinery in Houston, one of at least three bidders for the plant including Valero Energy (NYSE:VLO) and Suncor Energy (NYSE:SU), Reuters reports.
- LYB has not stated publicly what it considers an appropriate value for the plant, but Reuters says a source familiar with negotiations believes a sale ultimately could fetch $2B.
- The cost of renewable fuel credits may affect the price of the plant, because LYB will need to spend ~$200M this year on the credits, which could cap the price bidders are willing to pay, says a Tudor Pickering analyst.
Fri, Oct. 21, 10:31 AM
- A potential default by Venezuela's PDVSA would cause trouble for U.S. Gulf coast refineries, as the country is the primary supplier of foreign oil to the region, Bloomberg reports.
- PDVSA has been trying to persuade bondholders to exchange as much as $5.325B of outstanding notes maturing in 2017 for longer-term securities due in 2020, with the deadline for the swap due today after three extensions; the company says a failed bond exchange would make it difficult to make payments on its existing debt.
- “If PDVSA defaults, there could be a disruption of oil supply to the U.S. as creditors may try to seize payments made in the U.S.,” a Fitch Ratings analyst says. “Bondholders will definitely try to stake a claim on those dollars.”
- Phillips 66 (PSX -0.3%), Valero Energy (VLO +0.1%), PBF Energy (PBF +1%) and PDVSA subsidiary Citgo are among the largest buyers of heavy Venezuelan crude.
Mon, Oct. 10, 12:23 PM
- Royal Dutch Shell (RDS.A, RDS.B) said late last week that it would scrap plans to build an oil train terminal in Washington state that would have taken more than 400K barrels per week of Bakken and other inland crudes.
- Shell said the conditions of the global crude market and a tight capital environment made its project uneconomic; the rail facility would have connected to an existing rail line and supplied Shell's 145K bbl/day Anacortes refinery with light crude from North Dakota.
- Also last week, city planners of San Luis Obispo, Calif., rejected a rail terminal proposed by Phillips 66 (NYSE:PSX), two weeks after the city council of Benicia rejected Valero Energy's (NYSE:VLO) proposed 70K bbl/day facility.
- Despite the latest setbacks, Wood Mackenzie analyst Jonathan Garrett says low prices are still a bigger concern for North Dakota producers than transportation.
Thu, Sep. 29, 2:03 PM