There is a shortage of gasoline in the midwest right now. No doubt they are trying this is causing a supply issue, which means the refiners that can move gasoline into the area cheaply will be making a pretty penny.
If only Mr. Market knew how great this stock really is becoming. With the pipelines coming online to the gulf and the mid-con's losing their grip on margin, Valero is becoming the juggernaut it was meant to become.
I believe Valero management had this strategic change in their minds when they purchased the rail cars. I have a feeling that WCS will be the primary destination for these rail cars. Since the Keystone pipeline would not even be completed until 2015+ this makes sense. Apparently the payback period on these rail cars is pretty fast from what I have read.
Taken from the Valero Press Release:
"In addition to these company-specific actions, many of our refineries are well-positioned to receive growing volumes of cost-advantaged crude oil as new pipelines come into service in the industry, particularly in our U.S. Gulf Coast region."
Unless they plan on embarking into a merger with another company down there. Otherwise they might be paying a high price.
Thanks for the information.
Valero has 1.2+ million bpd capacity in the Gulf Coast. If the discount gets cheaper this could be a huge boon for Valero.
I have my account auto-investing in CST at the moment. Extremely undervalued in my opinion.
I have gone through the presentation at least 5 times and read the registration documents twice. It is going to be a great company in my opinion.
Has anyone seen the operation in Fort Dodge? That place is humming like crazy with the construction of new plants popping up everywhere. With the price of corn dropping I could see this is a major avenue of revenue growth here in Iowa.
I live an hour and a half away, but my brother practically lives next to the plant. He tells me that Valero has a large presence up there and it is feeding the town with great jobs.
Cargill is another large employer in the area with an increasing presence. This is pretty much in the middle of corn country, which offers a great location for ethanol feedstocks. Perhaps this will be a breakout year for Valero's ethanol segment.