Tesoro: Potential For Great Growth Not Worth The Risk
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Thu, May. 1, 2:59 PM
- Tesoro's (TSO +1.2%) plan for a crude oil rail-to-barge project at the Port of Vancouver in Washington has been delayed as the refiner awaits state requirements for an environmental impact statement, CEO Greg Goff said in today's earnings call.
- The project had been targeted to start up in late 2014 or early 2015; Goff said construction is now expected to begin during that time frame, with initial inland U.S. crude volumes running through the railport in mid-2015.
- Goff also says the estimated cost of the project has risen to $150M-$190M from ~$100 originally.
Wed, Apr. 30, 5:38 PM
Mon, Apr. 28, 12:45 PM
- Prices of U.S. crude grades such as West Texas Intermediate are starting to disconnect from Brent benchmark prices again, rebounding to ~$9/bbl two weeks after hitting a low for the year of less than $3.70.
- Stocks at the Cushing, Okla., hub have dropped by 16M barrels since late January but have jumped by 43M on the Gulf coast; overall, U.S. commercial crude oil inventories now stand at their highest level on record, according to Barclays.
- With the oil stuck there with nowhere to go, Gulf coast refiners can name their price - great for the likes of Valero Energy (VLO +1.9%), because they can then refine that oil into products such as gasoline that are allowable for export.
- Also today: PSX +0.9%, MPC +1.8%, HFC +0.7%, TSO +1.3%, CVI +0.9%, WNR +0.2%, PBF +1.1%, CLMT +2.3%, ALJ -1.2%.
- ETFs: USO, OIL, UCO, SCO, DTO, DBO, BNO, CRUD, USL, UWTI, DNO, DWTI, SZO, OLO, OLEM, TWTI
Fri, Apr. 4, 11:43 AM
- UBS analysts say the best is yet to come for U.S. refiners, believing growth in U.S. light oil production from shale risks overwhelming the country’s ability to absorb the barrels with the potential for a price blowout in the difference between Brent crude and Louisiana Light Sweet, with refining stocks as big beneficiaries.
- With oil prices hovering near $100 mark and the busy summer travel season coming soon, demand should only increase; if refinery investors get the spread blowout many are looking for by Q4, the firm thinks it could get exciting for the top names.
- UBS top refining stocks to buy now: CVRR, NTI, PSX, TSO, VLO, WNR.
Mon, Mar. 17, 6:52 PM
- Pain for investors in refiners such as Valero (VLO), Tesoro (TSO), Phillips 66 (PSX), HollyFrontier (HFC) and Marathon Petroleum (MPC) may be ready to turn into gain, Barclays says as it sees the U.S. refining segment among the market’s best-performing groups over the next year or two.
- The firm thinks the narrow LLS-Brent differential during the past two months mostly has been due to poor weather affecting both production and the logistics necessary to transport the production to refineries.
- Barclays believes investors should overweight the entire U.S. refining industry, but particularly favors VLO, which is "best positioned to take advantage of the changing Gulf Coast crude oil landscape,” and TSO, when “investors start to shift their focus to relative underperformers within the refining sector.”
Tue, Mar. 11, 2:44 PM
- Two contractors performing maintenance work at Tesoro’s (TSO -0.4%) Golden Eagle refinery in northern California suffered burns yesterday when they were splashed with sulfuric acid, an accident that occurred in the same processing unit where two employees were burned by acid last month.
- The first incident prompted state and federal regulators to raise broader questions about how TSO runs the plant; TSO said an investigation by the U.S. Chemical Safety Board was biased and that the agency overstepped its bounds.
- TSO claims yesterday's accident is unrelated to the Feb. 12 chemical release.
Wed, Mar. 5, 6:21 PM
- Energy Secretary Ernest Moniz said at the CERAWeek conference this week that the oil industry has failed to make a convincing case for why the U.S. government should allow the export of domestic oil when the U.S. still imports 5M bbl/day.
- The statement should please America's refiners, who have enjoyed increased profits from buying U.S. oil on the cheap to produce products such as gasoline.
- At the same time, Moniz went further than before in suggesting the Obama administration could redo the economic analysis that underpins its decisions on exporting American natural gas.
- Moniz also dismissed speculation that the Obama administration has in mind a hard cap on possible natural gas exports.
- Refiners: PSX, MPC, HFC, VLO, TSO, WNR, NTI, DK, CLMT, ALJ, CVI.
Fri, Feb. 28, 2:48 PM
- Refiners mostly continue to languish after shares were hammered yesterday as the Brent-WTI spread narrowed to its tightest level since last October.
- Credit Suisse isn't too excited about the near-term outlook; while March-April could see some widening of the spread given the transfer of inventory from Cushing to the Gulf, summer crude spreads should remain tight given as East of Rockies refineries ramp up for peak gasoline demand.
- On individual stocks, the firm says Western Refining (WNR -3%) and Phillips 66 (PSX +0.1%) should benefit from other businesses, while Tesoro (TSO +1.1%) could benefit from being recognized as a “Gulf Coast Refiner” but Delek US (DK -3.5%) needs to show signs of earnings improvement before it's worth buying.
- ETFs: XLE, ERX, OIH, VDE, ERY, DIG, DUG, XES, IYE, IEZ, PXJ, PXI, PSCE, FENY, FXN, RYE, DDG.
Thu, Feb. 27, 3:46 PM
- Oil refiners are getting hit today as Brent crude falls to its lowest price in more than a week on rising tensions in Ukraine, shrinking the premium to West Texas crude to the narrowest level since October.
- Given Ukraine’s location, the country's situation obviously will impact Brent more than WTI; meanwhile, WTI’s losses are limited after U.S. government data yesterday showed crude supplies at Cushing, Okla., declining to a four-month low.
- Phillips 66 (PSX -2.8%) has dropped 3.5% YTD, while Delek US (DK -5.3%) has plunged 17%, Valero (VLO -4.3%) has slipped 3.8%, Holly Frontier (HFC -3.1%) has fallen 8.2% and Marathon Petroleum (MPC -4.4%) is off 8.5% in 2014.
- Other decliners today: TSO -1.5%, ALJ -5.4%, WNR -4.2%, CVI -3.4%, CLMT -0.7%.
- ETFs: USO, OIL, UCO, SCO, DBO, DTO, BNO, CRUD, USL, DNO, UWTI, SZO, DWTI, OLO, OLEM, TWTI
Wed, Feb. 26, 9:46 AM
- Yesterday's U.S. government emergency order requiring tests of crude oil on trains prompts confusion as refiners and producers try to understand what the new requirements will mean to their operations and how broadly they will apply to shipments.
- "What do you want us to test for?” says Alon USA Energy's (ALJ) director of supply, trading and business development. "I’m not really sure what this means or what they expect from us."
- Tesoro’s (TSO) VP of development, supply and logistics says he isn’t sure what new procedures were being mandated since the company already tests crude shipments.
- Continental (CLR), the biggest producer of Bakken crude, praises the government’s effort to improve crude-by-rail safety.
- More Bakken names: EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
Fri, Feb. 21, 10:54 AM
- Tesoro (TSO +0.8%) has barred federal authorities from going inside its Golden Eagle refinery in California to investigate an incident in which two workers were burned by acid spewing from a broken pipe, the San Francisco Chronicle reports.
- State officials ordered a partial shutdown of the refinery near Martinez following a Feb. 12 incident after inspectors with California’s workplace safety agency found numerous suspected safety violations.
- TSO officials say the incident was minor and does not qualify under the rules for a federal investigation.
Wed, Feb. 12, 12:38 PM
- Chevron (CVX -0.4%) is still struggling to contain a fire at a natural gas well in Pennsylvania after yesterday's explosion that injured one worker and left another missing.
- The well fire is having an impact on CVX's Marcellus Shale operations; the company said last night that it has cut back on its operations in the region to dedicate personnel and resources to respond to the incident.
- Meanwhile, two workers have been injured at Tesoro's (TSO -0.6%) Martinez refinery in California, and a production unit has been shut down.
Thu, Feb. 6, 4:59 PM
- Tesoro (TSO) says it is replacing older cars in its crude-by-rail fleet to consist entirely of newer and safer CPC 1232-compliant rail cars, after evaluating rail car safety features.
- TSO says it also will make rail car design a part of its commercial considerations with all business partners who may ship crude oil into company-owned facilities.
- The upgrade comes after several explosive crashes that involved trains moving crude oil; TSO receives up to 50K bbl/day of Bakken crude at its 120K bbl/day refinery in Anacortes, Wash.
Thu, Feb. 6, 9:45 AM
- Tesoro (TSO -4.8%) opens sharply lower after Q4 results missed estimates as a result of lower refining margins, higher stock-based pay and a loss related to the sale of a refinery.
- Operating income in the refining and retail segment fell to $152M vs. $406M for the year-earlier period, driven primarily by a weaker margin environment across all operating regions.
- Although TSO processed more crude oil and other feedstocks in the quarter, its gross refining margin fell to $9.45/bbl vs. $15.11 in Q4 2012.
- Manufacturing costs rose to $392M vs. $239M in the year-ago quarter.
- TSO suffered lower refining margins, especially in the core California region, but it's a positive that the company’s balance sheet remains strong with $1.2B in cash, Wells Fargo says.
Wed, Feb. 5, 5:57 PM
Fri, Jan. 10, 2:40 PM
- Chevron's (CVX -1.9%) earnings guidance isn't impressing investors; it expects Q4 profit to be "comparable" with Q3 when it posted net income of $4.95B, but analyst consensus had estimated Q4 to come in at $5.69B.
- Unlike last year, when CVX’s refining business was a drag on earnings while its upstream business was strong, now refining is providing the boost - good news for Exxon Mobil (XOM +0.1%) and refiners, Morgan Stanley says.
- MS thinks most U.S. refiners will show a Q/Q improvement in capture rates, helping XOM more than CVX due to its significantly more absolute North American refining capacity; marketing margins also are improving sharply, a positive indicator for refiners with retail operations such as Marathon Petroleum (MPC), Tesoro (TSO), Phillips 66 (PSX), Western Refining (WNR) and Delek US (DK).
TSO vs. ETF Alternatives
Tesoro Corp is an independent petroleum refiner and marketer in the United States. Its subsidiaries, operating through three business segments, primarily transport crude oil and manufacture, transport and sell transportation fuels.
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