Thu, Apr. 23, 6:58 AM
Fri, Apr. 10, 5:17 PM
- The EPA agrees to issue final biofuel quotas for 2014 and 2015 under the federal Renewable Fuel Standard by Nov. 30 in a tentative settlement of an energy industry lawsuit which had challenged EPA delays in establishing the mandates.
- Refiners and biofuel producers have complained that the EPA's repeated delays in setting renewable fuel use requirements have led to uncertainty and volatility in biofuel markets.
- Refiners are required under the RFS to blend a certain amount of biofuels into gasoline and diesel based on the targets established by the EPA; potentially relevant tickers include VLO, TSO, PBF, PSX, ALJ, MPC, WNR, HFC, CVI.
- Biofuels producers also crave the certainty and market demand guaranteed by the annual targets, but they believe the EPA should not back down from setting aggressive renewable fuel quotas; potentially relevant tickers include REGI, FF, AMRS, GEVO, CDTI, SZYM, OTCPK:KIORQ.
Mon, Mar. 30, 9:44 AM
- In a press release issued after Friday's close, Tesoro (TSO +0.2%) said the strike at its Martinez, Calif., refinery resulted in higher operating costs than it expected and lower capture rates than historical averages in its West Coast system.
- TSO now estimates California operating costs of $7.70-$7.95/bbl, and that the Martinez strike and Anacortes, Wash., and Salt Lake City turnarounds will hurt Q1 system capture rates by $1.50-$2.00/bbl; TSO expects improvement in capture rates during Q2 as it completes planned turnarounds.
- TSO also says it reached agreements with the local USW at its Carson, Calif., and Anacortes, Wash., refineries, and employees are returning to work.
Fri, Mar. 27, 9:18 AM
- Tesoro (NYSE:TSO) says it expects to restart its 166K bbl/day Golden Eagle refinery in Martinez, Calif., today, in a sequenced start-up that should take about two weeks.
- TSO workers walked off their jobs at the refinery on Feb. 1 as part of the national strike that later spread to 15 plants, but ratified a new contract on Wednesday.
- As the strike ends, TSO is turning its attention to $390M in planned upgrades at its Anacortes, Wash., oil refinery, partly intended to improve its export capabilities.
Thu, Mar. 26, 10:59 AM
- Cowen analysts see plenty of room to go in gains for the refinery sector, and moves up Q1 earnings estimates for across the firm's coverage universe.
- Cowen acknowledges that while crack spreads should start moving back to normal levels as industry maintenance winds down after April, margins are still strong, and many expect one of the largest-ever travel seasons this summer.
- The six stocks rated Outperform at Cowen are Delek (NYSE:DK) with a $43 stock price target, Marathon Petroleum (NYSE:MPC) with a $120 target, PBF Energy (NYSE:PBF) at $35, Tesoro (NYSE:TSO) at $90, Valero (NYSE:VLO) at $70 and Western Refining (NYSE:WNR) with a $60 price target.
Wed, Mar. 25, 5:45 PM
- The difference between the price of oil and the gasoline made from it would be bad news for U.S. refiners if the spread shrinks, but Cowen analyst Sam Margolin and Jason Gabelman offer three reasons why they’re not worried.
- With valuations remaining attractive, the analysts see three themes emerging to carry continued outperformance in refineries: positive consumer fuel demand response to lower prices, sustained crude oversupply into the fall turnaround period, and midstream consolidation and growth as a shareholder-friendly use of cash.
- The analysts have Outperform ratings on VLO, TSO, MPC, WNR, PBF and DK; only WNR failed to finish with a solid gain in today's trade.
Wed, Mar. 25, 10:23 AM
- Striking workers are scheduled to end their nearly two-month walkout and return to their jobs next week at Royal Dutch Shell's (RDS.A, RDS.B) refinery at Deer Park, Tex., according to a United Steelworkers union official.
- Three Motiva Enterprises refineries in Louisiana and Texas co-owned by Shell and Saudi Aramco saw workers returning to their jobs this week, and USW members also are returning to work this week at Tesoro's (NYSE:TSO) Anacortes, Wash., and Carson, Calif., plants.
- Strikers at TSO's Martinez, Calif., refinery - the only refinery that actually was shut due to the strike - are set to vote on the new contract this week; however, negotiations between the union and management at BP's Whiting, Ind., refinery are said to be proceeding slowly.
Wed, Mar. 18, 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
Wed, Mar. 18, 12:44 PM
- United Steelworkers union members who have been on strike at the Motiva recovery in Port Arthur, Tex. - the largest in the U.S. - ratified a final contract last night, and workers are expected to return to their jobs next week after walking off their jobs on Feb. 21.
- The union also says workers at three Tesoro (TSO +2.1%) refineries on the west coast have made progress in finalizing contracts, with return-to-work agreements - usually the final step before ratification votes - under discussion.
- Union negotiators reached an industry-wide agreement to settle the strike with lead refinery rep Royal Dutch Shell (RDS.A, RDS.B) last Thursday; Shell is a co-owner of Motiva.
- The union says BP, Lyondell Basell (NYSE:LYB) and Marathon Petroleum (NYSE:MPC) "continue fights on tough local issues."
Tue, Mar. 17, 2:58 PM
- Oil refinery stocks are not as expensive as they look, Deutsche Bank analyst Todd Ryan writes, as he recommends buying Valero Energy (NYSE:VLO), Marathon Petroleum (NYSE:MPC), Tesoro (NYSE:TSO) and Phillips 66 (NYSE:PSX).
- After stripping out implied MLP-related valuations, Ryan finds "reasonable" stock price multiples at ~5.0x, in line with average levels seen in late 2013 and early 2014; more importantly, revisions are likely to remain a steady tailwind, with nearly 10% upside to 2015 EBITDA estimates using fairly conservative assumptions of $5/bbl Brent-WTI for 2015.
- With an overall healthy refining backdrop, a healthy Q1 EPS setup as estimates look low, and higher investor appreciation for the retail business with comps trading at ~1.5x turns above the five-year average, Ryan sees further upside for the group over the near term.
Mon, Mar. 16, 4:59 PM
- A tentative national agreement to end the six-week U.S. refinery strike has struggled to win ratification at eight plants as workers and companies try to settle local issues, union reps say.
- The deal reached Thursday by the United Steelworkers and lead industry negotiator Royal Dutch Shell (RDS.A, RDS.B) to end the biggest walkout of its kind in 35 years appears to be showing signs of quick passage at just four plants.
- Workers at four plants that are owned or co-owned by Shell, which include three Motiva Enterprises refineries, have scheduled or are expected to hold votes this week to ratify the agreement and could be back at work next week, but local labor talks are stalled at other plants.
- Other relevant tickers: TSO, BP, MPC, LYB, OTCQB:HUSKF
Thu, Mar. 12, 3:59 PM
- Negotiators for the United Steelworkers union have tentatively accepted a deal from Shell Oil (RDS.A, RDS.B) to settle the six-week-long strike that has affected refineries and chemical plants across the U.S., a USW statement says.
- The deal still requires approval of the union’s international policy committee and the local union representing workers at Shell’s Deer Park, Tex., refinery before it goes to a vote of union members nationwide.
- The union and Shell, which is representing the industry in the talks, had been in talks since Monday.
- Relevant tickers: TSO, BP, MPC, LYB, OTCQB:HUSKF.
Thu, Mar. 12, 2:12 PM
- Negotiators from the United Steelworkers union and Shell Oil (RDS.A, RDS.B) are continuing to meet today, part of a four-day stretch of negotiating that is the longest the two sides have met since the strike began Feb. 1.
- In a sign that union negotiators may see a deal coming, the Steelworkers sent a message last night to members that the union’s policy committee is traveling to Houston to be available to review any proposals that come out of the talks.
- The dispute started initially with nine facilities but has since expanded to 15 refineries and chemical plants across the U.S., affecting TSO, BP, MPC, LYB, OTCQB:HUSKF and Shell.
Tue, Mar. 10, 11:37 AM
- U.S. coastal refiners "could be a shore thing" for investors, Credit Suisse says, noting that the group can buy domestic crude when it is too cheap or profit from discounted waterborne barrels.
- Tesoro (NYSE:TSO) is "leading the charge," the firm says; with more than 350K bbl/day of crude capacity offline in a finely balanced market with growing vehicle miles traveled, west coast margins have spiked and could remain elevated for some time.
- PBF Energy (NYSE:PBF) is upgraded to Outperform from Neutral, as it is a key beneficiary of low crude prices, an oversupplied crude market for mediums and heavies, plus leverage to WTI domestic pricing.
- Phillips 66's (NYSE:PSX) target price is raised to $100 from $85, as Credit Suisse believes the longer-term upside looks strong and intact.
- Among others in the group, the firm says Marathon Petroleum’s (NYSE:MPC) self-help is underestimated, and Valero’s (NYSE:VLO) rising cash returns to shareholders and Delek’s (NYSE:DK) rising free cash flow should drive a re-rating of their equity.
Wed, Mar. 4, 3:28 PM
- Even as U.S. refiners and striking union workers returned to the bargaining table today for a new round of talks, the two sides appear to be digging in for a protracted struggle that could last through the spring.
- Royal Dutch Shell (RDS.A, RDS.B) said Monday that by midsummer its Deer Park refinery in Texas will be fully staffed with newly trained employees who are not affiliated with the United Steelworkers union, and added that ~20% of striking workers at the plant have defied the union and returned to work.
- Workers also have begun returning to their jobs at refineries owned by Shell and Saudi Aramco JV Motiva Enterprises, and LyondellBasell (NYSE:LYB) and Tesoro (NYSE:TSO) also say a growing number of employees are coming back to work.
- LYB said yesterday it had filed a complaint with the National Labor Relations Board alleging the union had threatened and harassed people trying to cross picket lines.
- The union has filed its own complaints to the NLRB in recent weeks, alleging Shell, LYB, TSO, BP and Marathon Petroleum (NYSE:MPC) have engaged in unfair practices, including threatening and coercing workers and failing to bargain in good faith.
Tue, Feb. 24, 6:57 PM
- Refinery profit margins on the U.S. west coast have spiked over the past week, as a refinery explosion and a spreading strike by refinery workers has taken almost 25% of the region's gasoline-making capacity offline, Platts reports.
- Cracking margin netbacks for west coast refiners reached $31.75/bbl on Monday, up from $18.96/bbl prior to last Wednesday's explosion at Exxon Mobil's (NYSE:XOM) 149.5K bbl/day refinery in Torrance.
- Meanwhile, the strike by U.S. refinery workers that began Feb. 1 also weighs on west coast operations, with Tesoro's (NYSE:TSO) 166K bbl/day Golden Eagle refinery in Martinez, Calif., idled.
- The three west coast refineries hit by the strike all are owned by TSO; the other two are the 251K bbl/day Carson, Calif., refinery and the 120K bbl/day plant in Anacortes, Wash.
TSO vs. ETF Alternatives
Tesoro Corp is an independent petroleum refiner and marketer in the United States. Its subsidiaries operate through three business segments, transport crude oil and manufacture, transport and sell transportation fuels.
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