 |
|
| Author |
U.S. Refining Margins Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
 Posted: Tue May 15, 2012 4:32 pm Post subject: |
 |
|
Crude off 10%, gasoline in SoCal up 35cents in the last two weeks. The Memorial Day hit defies markets!
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
 |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri May 04, 2012 7:42 am Post subject: |
|
|
Demand slam is finally pushing against refinery squeeze: wholesale gasoline prices are now officially 10% off the highs of March, and June futures now $2.99. $4gas is a magic number to this economy.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Wed May 02, 2012 6:49 am Post subject: |
|
|
We're really suffering from this (non)transition to heavy crude. Go Delta!
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Wed May 02, 2012 1:02 am Post subject: |
|
|
Morningstar on VLO's 1Q earnings.
| Quote: | | Valero Energy VLO reported a net loss in the first quarter largely because of impairment charges related to the closure of its Aruba refiner. A loss of $432 million, or $0.78 per share, was in line with the company's interim update in mid-April. Excluding the impairment charge, first-quarter operating income fell to $367 million from $786 million a year earlier, thanks to narrower crude differentials that were partially offset by stronger gasoline and diesel margins. Refining throughput increased by 449,000 barrels per day as a result of the addition of the Pembroke and Meraux refineries, which offset heavy turnaround activity throughout Valero's system, including plantwide shutdowns at Wilmington and St. Charles. Ethanol segment operating income failed to meet our expectations, at $9 million down from $44 million a year ago as excess supply pressured margins. Retail segment operating income of $40 million, down from $66 million, also fell short of our expectations because of lower fuel margins. However, retail margins typically come under pressure with rising crude and product prices, as was the case in the first quarter. Given the relatively strong market conditions recently and the reduction in turnaround activity, we expect Valero will post stronger results in the second quarter as is historically the case. Additionally, Valero's overall competitive position should strengthen throughout the year with the completion of hydrocracker projects at Port Arthur (third-quarter startup) and St. Charles (fourth-quarter startup). The completion of these larger projects should also lead to a step-down in capital spending next year to about $2.5 billion from $3.5 billion this year. The resulting increase in free cash flow, assuming conditions do not deteriorate significantly, should allow Valero to support continued shareholder distributions. The firm repurchased $106 million in stock during the first quarter and aims to have one of the highest cash yields among its peers. In addition to the improving financial position, we continue to view Valero favorably given the high-grading of its portfolio during the past few years, improving asset quality, and the ability to take advantage of the growing export market. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Mon Mar 19, 2012 12:32 pm Post subject: |
|
|
Morningstar's latest update on VLO.
| Quote: | | Valero VLO announced Monday that it will suspend refining operations at its 235 thousand barrel per day Aruba refinery by the end of the month because of unfavorable refinery economics. Valero expects those unfavorable economics to continue and is considering operating the facility as a terminal or storage site as a result. The firm previously suspended operations at the facility in mid-2009 then resumed production in late 2010 as conditions improved. However, it was never able to generate positive cash flow consistently, given the challenging margin environment. Also, island refineries typically face higher costs, leaving them at a disadvantage against U.S. refineries that have access to low-cost natural gas. Hess HES shut in its HOVENSA refinery in St. Croix earlier this year for similar reasons. As a result, it is unlikely Aruba will resume refining operations again. We plan to adjust our forecasts for Valero to incorporate the closure of the refinery, but do not anticipate a change in our fair value estimate. However, the shutdown of Aruba will probably result in a tighter East Coast market, which has experienced the bulk of refining rationalization in the past year. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Tue Jan 17, 2012 3:57 pm Post subject: |
|
|
Morningstar on VLO's 4Q earnings.
| Quote: | | On Monday, Valero VLO announced fourth-quarter earnings would fall between $0.00 and $0.10 per share, including an aftertax benefit of about $161 million or $0.29 per share, resulting in full-year earnings of $3.59-$3.69 per share, below consensus estimates. The profit warning follows similar announcements by Tesoro TSO and Chevron CVX, which suffered similarly from weak refining margins during the fourth quarter. The announcement comes as little surprise, given the deteriorating market conditions since the end of the third quarter, most notably the collapse in the West Texas Intermediate/Brent spread from well o ver $20 a barrel in the third quarter to about $10 per barrel by the end of the fourth quarter. Valero also cited weak margins on gasoline and petrochemical feedstocks as well as a narrowing of heavy sour feedstocks. We plan to adjust our estimates for 2011 to reflect Valero's most recent guidance, but our fair value estimate is unchanged. We previously modeled a general weakening in refining conditions over our five-year forecast to reflect a return to midcycle levels from the robust levels of 2011. Also, conditions have since strengthened, though only marginally and not to third-quarter levels, since the end of the fourth quarter. Even if refining conditions remain weak, we think Valero remains better positioned than many of its peers, given its size, complex assets, geographic diversification, and strong balance sheet. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Fri Dec 02, 2011 1:55 pm Post subject: |
|
|
Morningstar's latest update on Sunoco:
| Quote: | | With refining conditions continuing to deteriorate on the East Coast, Sunoco SUN announced Thursday it plans to idle its Marcus Hook, Pa., refinery immediately, much earlier than it originally planned. The company previously announced it would stop operations at the refinery in July 2012 if a buyer or alternate use for the facility could not be found. Sunoco will continue to pursue a sale of the refinery. In the meantime, it will increase capacity utilization at its Philadelphia refinery and operate the facility as long as conditions warrant. Plans to idle that facility no later than July 2012 unless a buyer can be found remain unchanged. We continue to believe buyers will be difficult to locate, given the abundance of available refining assets in the region and the poor competitive dynamics of the East Coast market. Separately, Sunoco announced it plans to spin off the remaining 56.66 million shares (80.94% of total outstanding) of SunCoke SXC it owns to shareholders as a special dividend. The spin-off will take place Jan. 17 with Sunoco shareholders receiving .53 share of SunCoke for every share of Sunoco held. We plan to incorporate the Marcus Hook and spin-off announcement into our model and will adjust our fair value estimate accordingly. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Wed Nov 02, 2011 12:05 am Post subject: |
|
|
Morningstar on VLO's 3Q earnings:
| Quote: | | Valero Energy's VLO third-quarter earnings surged to $1.2 billion from $303 million a year ago as strong refining market conditions improved throughout much of the quarter. Valero saw its throughput margin per barrel climb to $13.24 from $8.13 a year earlier and $11.41 in the second quarter. The improved margins were partially attributable to higher margins for diesel and jet fuel. In addition, Valero benefited from steep discounts of light-sweet crude in the Mid-Continent and improved heavy-sour feedstock discounts. As a result, Mid-Continent throughput margins more than doubled to $22.27 per barrel from $8.06 last year and $16.50 in the second quarter. Margins in all of Valero's other operating regions also improved with the exception of the North Atlantic, whic h includes the recently acquired Pembroke, U.K., refinery. Gulf Coast margins improved to $13.08 per barrel from $8.34 last year and $11.30 in the second quarter as the company probably benefited from increased throughput of discount Eagle Ford volumes in Corpus Christi and Three Rivers. Throughput volumes also rose to 2.6 million barrels per day from 2.2 million last year due to the addition of Pembroke and resumption of operations at Aruba. Retail earnings slipped to $97 million from $105 million last year as a result of lower fuel margins. Ethanol earnings jumped to $107 million from $47 million last year thanks to higher margins and increased production volumes. While Valero management cautioned that fourth-quarter margins have fallen from the highs of the second and third quarters, we expect continued strong performance during the fourth quarter for the company as margins and discounts remain well above last year's levels. Also, Valero continues to see strong internatio nal product demand, which should support continued exports. During the quarter, Valero repurchased 13.5 million shares for $268 million. We think additional share repurchases could occur in the fourth quarter if market conditions remain strong. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
|
| Posted: Fri Sep 02, 2011 12:57 pm Post subject: |
|
|
Morningstar on VLO's acquisition spree:
| Quote: | | Valero Energy VLO continued its acquisition streak Thursday by announcing the purchase of Murphy Oil's MUR 135,000 barrel per day refinery in Meraux, La., and related logistics assets for $325 million. Earlier this year, Valero acquired Chevron's CVX 270,000 b/d Pembroke, United Kingdom, refinery and associated assets for $730 million. The total purchase price includes an adjacent terminal, a 20% equity interest in the Collins Product Pipeline and T&M terminal, and a 3.2% interest in the Louisiana Offshore Oil Port valued at $55 million, according to Valero, implying a cost of $270 million for the refinery. With a valuation of roughly $2,000 per throughput barrel and $200 per complexity barrel, the acquisition is in line with other refinery transactions of the past few years. Valero will also acquire $300 million worth of associated inventories. In addition to adding capacity, Valero plans to take advantage of feedstock and refined product blending opportunities through the integration of its nearby St. Charles refinery. However, it has no plans to do so through pipelines or other infrastructure that would require additional capital spending. The Meraux refinery does not require any regulatory capital spending, enhancing the attractiveness of the deal. Given the integration opportunities and the attractive valuation, we view the acquisition as a positive for Valero. While domestic refining will probably face challenges long-term, we think Valero has improved its competitive position over the past two years. It has not only sold poorly positioned refineries on the East Coast, but also opportunistically added higher-quality refineries on the cheap that fit better with its existing assets. As a result, Valero holds an overall stronger portfolio than it did a few years ago, in our opinion. |
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
Powered by phpBB
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
