Valero Energy Corp (VLO)

[Trader Al]

Will Brexit have any affect on VLO?

[radar72]

Well, not too much damage done here today. Still holding mine. We'll see what happens next week.

[radar72]

Well that set me back a few days! Still, VLO is holding up pretty good considering. I can actually see a few ways that US refiners could benefit from this mess. I guess we'll see. Still holding all mine here.

[radar72]

Nice close here today.

[radar72]

Nice move so far today. Looking at the 6 month chart again, I think we actually need to hold over $55 to confirm a new leg up. Not too far from that now! Still holding all mine.

[radar72]

Looking pretty good so far today. Slow and steady...

[radar72]

Slowly working our way back up. Still holding on to all of mine. If we can move over $54 soon I think we're in for a really big run here.

[radar72]

Monster buying volume in last minute of trading today.

[Dutch1]

I don't see as much happening as you do I guess

[radar72]

Not only am I watching, I am owning VLO! A whole bunch now. Not too bad on the close today. Looks set up to rock n' roll next week. Good luck to all and have a nice weekend.

[Dutch1]

Are you watching the same stock as I do???

[radar72]

Still riding the roller coaster here!

[radar72]

Good close.

[radar72]

VLO holding up pretty good today so far.

[radar72]

Good bounce so far today....

[radar72]

Just grabbed a few more here at $50.07/$50.08.

[radar72]

Still holding mine. Wish I waited to buy, BUT $50 seems to be pretty good support here.

[radar72]

Bought VLO yesterday and today. Looks like a pretty good entry point here.

[Tripledog]

Picked up a starter today x div day usually drives PPS down in most

[Timothy Smith]

Valero Energy's (NYSE:VLO) proposed crude-by-rail project at its 145K bbl/day Benicia refinery in northern California was rejected by local planners this week, the first such facility on the U.S. west coast to end a years-long wait for permits with a rejection.

[durrdurr]

Still holding for over three years since $19 a share pick up more around $34 and $53 a share -

[magness]

This years estimate is $8.16 how is this trading at $63?

[rmjackson]

HOUSTON, Oct 28 (Reuters) - Valero Energy Corp plans for its 15 refineries to operate at a combined throughput between 99 percent and 103 percent of total capacity of 2.7 million barrels per day (bpd) in the fourth quarter, the company said on Wednesday. fyi--- look very good to me...gl via hatman

[Timothy Smith]

Valero Energy (NYSE:VLO): Q3 EPS of $2.79 beats by $0.13.

Revenue of $22.58B (-34.4% Y/Y) beats by $4.35B.

[Trader Al]

ZACKS article on earning for VLO.
http://finance.yahoo.com/news/valero-energy-vlo-poised-beat-194507541.html

[Trader Al]

Citi maintains buy rating on VLO, target price of $74.
Citi Downgrades Refiners: What You Should Know $ALDW $CVRR $HFC $PBF $WNR $CVRR $NTI $PSX $VLO $MPC benzinga.com/analyst-rating...

[Trader Al]

Do ugly 3Q energy earnings mean a bottom? Top picks here > money.usnews.com/money/pers... $XOM $VLO $UPL $USO $OIL

[Trader Al]

Earnings is next week, 10/28, do you see vlo meeting expectations. Do you see an ncrease in dividend?

[Timothy Smith]

Thank you so much for sharing. This is very insightful.

[Trader Al]

Here is a positive article for VLO.

Gasoline Inventories Fell More than Analysts Expected
Market Realist By Manu Milan
October 19, 2015 8:26 AM
????
Refinery Outage Could Increase Gasoline Prices

Gasoline inventories
The EIA (US Energy Information Administration), in its weekly Petroleum Status Report released on October 15, states that US gasoline inventories fell by 2.6 MMbbls (million barrels) to 221.3 MMbbls in the week ending October 9. Moreover, the American Petroleum Institute released a report on October 14, stating that gasoline supplies fell by 5.0 million barrels. Analysts had expected inventories to fall by 1.65 MMbbls.


Petroleum Administration Districts
According to the EIA report, gasoline inventories in PADD’s (Petroleum Administration for Defense Districts) for the week ending October 9 were as follows:

gasoline inventories in the East Coast region, or PADD 1, slightly rose from 63.2 MMbbls to 63.5 MMbbls
inventory levels in the Midwest region, or PADD 2, were the same, at 46.8 MMbbls
inventory levels in the Gulf Coast region, or PADD 3, fell from 76.9 MMbbls to 74.7 MMbbls
inventory levels in the Rocky Mountain region, or PADD 4, slightly fell from 7.2 MMbbls to 7.0 MMbbls
inventory levels in the West Coast region, or PADD5, saw a slight fall of 0.7 MMbbls and settled at 29.2 MMbbls
Why investors track gasoline inventory data?
Gasoline is one of the important sources of energy used for transportation and inventory levels drive the price of gasoline. Gasoline is produced from crude oil, so the price of gasoline and the price of crude oil are correlated with each other. Hence, investors tend to take a close look at gasoline inventories.

Who gains?
A fall in gasoline inventories that is more than analysts expected could be bullish for gasoline prices. On the other hand, a rise in prices could bring in more revenue for refiners such as Tesoro (TSO), Phillips 66 (PSX), and Valero Energy (VLO). Phillips 66 accounts for 3.2% of the Vanguard Energy ETF’s (VDE) portfolio.

Refiners’ margins are determined by crude oil prices, or USO. A low price for crude oil could reduce the cost of operating for refiners so that more profits could be expected. On the other hand, a higher gasoline price could benefit logistics companies, like Tesoro Logistics (TLLP) and Phillips 66 Partners (PSXP), through a greater volume of gasoline transports.

Gasoline production

Gasoline production rose from ~9.31 MMbpd (million barrels per day) in the week ended October 2, to ~9.62 MMbpd in the week ended October 9. Average gasoline production for the last four weeks was ~9.54 MMbpd for the week ended October 9. That was 1.05% more than the ~9.08 MMbpd average over the corresponding period last year for the week ending October 10, 2014.


U.S. Gasoline Demand 2015-10-16
Enlarge Graph
Gasoline demand

Gasoline demand rose by ~0.18 MMbpd for the week ending October 9. The 8.96 MMbpd in demand in the week ended October 2 rose to 9.137 MMbpd in the week ended October 9. Gasoline demand averaged 9.08 MMbpd over the last four weeks for the week ending October 9. This was ~1% more than the corresponding period last year. In other words, demand was 8.78 MMbpd for the week ending October 10, 2014.

What do demand and production levels imply?

From the above production and demand data, we can notice that production and demand levels seem to be matching each other. Matching production and demand levels build up inventory, but this isn’t the case now as gasoline inventories have fallen, so net trade flows could be the reason for the fall in inventory levels.

Impact on refiners

Rising gasoline consumption and production are potentially bullish for gasoline prices. This could elevate the margins for the refiners such as Marathon Petroleum (MPC), Valero Energy (VLO), Hess Corporation (HES), and Tesoro Corporation (TSO). These companies make up 8.52% of the Vanguard Energy ETF (VDE).

Rising consumption levels could also be positive for midstream MLPs such as Phillips 66 Partners (PSXP) and MPLX LP (MPLX) by increasing the volume of transportation. This could lead to a rise in revenues for these logistic players.

Gasoline production

Gasoline production rose from ~9.31 MMbpd (million barrels per day) in the week ended October 2, to ~9.62 MMbpd in the week ended October 9. Average gasoline production for the last four weeks was ~9.54 MMbpd for the week ended October 9. That was 1.05% more than the ~9.08 MMbpd average over the corresponding period last year for the week ending October 10, 2014.


U.S. Gasoline Demand 2015-10-16
Enlarge Graph
Gasoline demand

Gasoline demand rose by ~0.18 MMbpd for the week ending October 9. The 8.96 MMbpd in demand in the week ended October 2 rose to 9.137 MMbpd in the week ended October 9. Gasoline demand averaged 9.08 MMbpd over the last four weeks for the week ending October 9. This was ~1% more than the corresponding period last year. In other words, demand was 8.78 MMbpd for the week ending October 10, 2014.

What do demand and production levels imply?

From the above production and demand data, we can notice that production and demand levels seem to be matching each other. Matching production and demand levels build up inventory, but this isn’t the case now as gasoline inventories have fallen, so net trade flows could be the reason for the fall in inventory levels.

Impact on refiners

Rising gasoline consumption and production are potentially bullish for gasoline prices. This could elevate the margins for the refiners such as Marathon Petroleum (MPC), Valero Energy (VLO), Hess Corporation (HES), and Tesoro Corporation (TSO). These companies make up 8.52% of the Vanguard Energy ETF (VDE).

Rising consumption levels could also be positive for midstream MLPs such as Phillips 66 Partners (PSXP) and MPLX LP (MPLX) by increasing the volume of transportation. This could lead to a rise in revenues for these logistic players.

[Timothy Smith]

Hard to call short term play here but long term in very good shape.

[Trader Al]

Well,it is down again, now $60.32. I was hoping for a run up into earnings. I guess not. Thanks for your analysis.

[Timothy Smith]

The company had $5.8 billion in cash and short-term investments at the end of 2Q15, up from $3.5 billion at the end of 2Q14. Total debt was $7.3 billion, and net debt was 20% of total capital.

As such, the company has sufficient resources to invest in growth projects and to return substantial capital to its shareholders by stock buyback and increasing dividend payments.

Joe Gorder, Valero's Chairman, emphasized in the latest quarter report that the company continues to focus on its key priorities of optimizing its operations, generating strong results, and returning cash to stockholders.

In fact, Valero increased its targeted total payout ratio to approximately 75% of 2015 net income from the previous target of 50%. According to its latest price, the forward annual dividend yield is at 2.48% and the payout ratio only 15.4%.

The annual rate of dividend growth over the past three years was very high at 51.8%, over the past five years was at 11.8%, and over the past 10 years was very high at 21.9%.

[Timothy Smith]

It's hard to say where Valero is heading given the high volatility in the oil market. The company might face lower margins -- driven by narrower spreads -- in the coming months. And the ethanol market, which is still soft, could hold back Valero's earnings.

These factors play against VLO's stock and pressure shares lower. But if oil prices change direction again and decline, and the company keeps reducing its operating expenses per barrel, these developments could drive the stock price further up.

[Trader Al]

Do you see a dividend increase? They have increased dividend the last 3 years. If yes, will they announce prior to earnings on 10/28?

[Timothy Smith]

Oil price shouldn't be affecting it as lower feedstocks help.

I would agree pressure on margins may be an issue.

I have been watching closely and have seen some concerning activity. More DD to follow.

[Trader Al]

Earnings is next week, are you still bullish? Did the drop in oil price hurt VLO today?

I found this info today.

BUZZ-Valero Energy: Cracks appearing
12:45 PM ET, 10/19/2015 - Reuters
** Rising energy inventories and stiff chart resistance threaten to end Valero Energy's outperformance

** VLO up 25 pct YTD vs S&P 500 down 1.3 pct, and S&P 500 Energy Sector down 15 pct

** Although co's Q2 revenue tumbled 28 pct yr/yr, handily beat Street

** Strong refining margins led to 118 pct yr/yr increase in Adj EPS

** Indeed, VLO refineries operated at 96 pct throughput capacity utilization in Q2, and lower energy expense and less maintenance contributed to yr/yr cost savings

** However, with DOE total US motor gasoline inventories and US distillate FO inventories up 11 pct and 35 pct from 2014 lows (Thomson Reuters Datastream), co could face margin pressure

** Street currently calling for 27 pct sequential fall in Q3 revenue and 47 pct yr/yr decline, according to IBES

** Adj EPS expected to be up yr/yr, but essentially flat qtr/qtr

** Analysts skewed bullish with $75.00 median PT

** Technically, VLO appears to have failed as probed its 2007 peak. Chart: http://link.reuters.com/bem85w

** Monthly MACD rolling over after diverging at highs, so pressure can mount on support toward $51.70

** Below here can see VLO spill out of the rising multi-year channel

** Thrusting above $71.86, however, can clear way to $75.00/$80.00 (Messaging: [e-mail])

[Trader Al]

Anyone has any insight on the price action for VLO today? Market turns positive and VLO sets new LOD. I don't see any news.

[Trader Al]

We had a nice run on VLO. Earnings on 10/28. Anyone has projections on how far this run up will go. 51 wk high is around 71. How will earning impact stock price.

[Trader Al]

Nice to see the run up!! Any news driving the stock price?

[Trader Al]

Any reason for the big decline today?

[Timothy Smith]

I remain very bullish on $VLO

[Trader Al]

Thanks for the info. I see it is helping the stock price. Market down, VLO is up.

[Timothy Smith]

Valero Energy Partners (NYSE:VLP) agrees to acquire the Corpus Christi Terminal Services Business from Valero Energy (NYSE:VLO) for $465M.

The business includes two terminals that support VLO's Corpus Christi East and West refineries, with assets consisting of 134 tanks with 10.1M barrels of storage capacity for crude oil, intermediates and refined petroleum products.

Joe Gorder, CEO of VLP's general partner, says the deal helps the company stay on course to deliver 25%-plus Y/Y distribution growth.

[Trader Al]

Ok. Thanks.

[Timothy Smith]

This should have been rebounding more. Margins are strong.

[Trader Al]

Why is the low oil price not affecting vlo stock price?

[Timothy Smith]

Valero benefits from the low oil price and corresponding higher crack spread, in Q3 the crack spreads are even higher than they were in the previous quarters, which will lead to very good results for the quarter ending in three weeks.

[Timothy Smith]

Very compelling proposition here. More DD will be posted on our commodity board.

[Trader Al]

Thanks for the info.