Excerpts from MS comments on gasoline of 5/15 “The EIA showed on 5/5 that domestic demand is down 2.5% YoY which is worrisome to us particularly with the trend of high US refining utilization rates. However the panel we held last week all seemed to agree that US gasoline demand looks largely similar to last year, or closer to flattish YoY, and potentially not as bad as the data seems (pointing to the risk of focusing too much on weekly data and the EIA's history of posting revisions for past periods). Further, gasoline exports continue to be strong, 174% higher YoY at 717 Mmbbl/d, providing support to the domestic balance. We also note that the EIA recently raised its US gasoline consumption forecast, increasing its 2Q17 expectations by 0.6% to 9.52 MMbbl/d.”
I'm watching American Greed on CNBC. The episode is about a guy in Baltimore, Rodney Haley, who made over $9 million selling RINs. He didn't make any biofuel. He just created and sold strings of numbers. His company, Green Energy, was approved as a RIN seller by the EPA, which was not required to visit plants. In this case,there was no plant. Rodney got caught when neighbors complained about his 22 exotic cars, which he parked all around his house, while collecting unemployment. He got 12 years in prison. I don't know if the RIN brokers or their customers got burnt -- there had to be some money from the sale of the cars.. The narrator said that the EPA has since tightened their approval procedures. I wasn't surprised that it happened. I was surprised at how easy it looked. This guy was no mastermind.
50,50,50 Test this month is a done deal
Four week average of gasoline product supplied__ 5/12/17 and 5/13/16_____9306___9558____down 2.6% Four week average of gasoline exports__________5/12/17 and 5/13/16______ 646___ 413_____up 56.4% Total gasoline supplied (in thousand barrels per day)_____________________9952___9971____down 0.2%
VLO the best of the best, my second highest holding, VLO by Labor day 75
Trump gasoline tax?
Any thoughts on whether this would actually happen, and how it might affect refiners? Could he push for both a higher federal gasoline tax along with a RIN obligation reduction, to offset the impact?
This may be a better way to look at the EIA finished motor gasoline supplied numbers (in thousand barrels per day) Four week average of gasoline product supplied__ 5/5/17 and 5/6/16_____9248___9480____down 2.4% Four week average of gasoline exports__________5/5/17 and 5/6/16_____ 681___ 407_____up 67.3% Total gasoline supplied__________________________________________9929___9887____up 0.4%
Before anyone has a heart attack, seeing VLO down $3.29 to $62.03 in pre-market, note that the price is based on the trade of two shares.
Although VLO supposedly beat estimates in Q1, results were very disappointing in light of the indicative crack spreads that the company provided throughout the quarter. Last year, VLO reported adjusted earnings of $283MM or 60 cents per share after LIFO adjustments. In Q1 of this year, indicative crack spreads were significantly higher in each region (See prior post.), yet adjusted earnings were only $305MM or 68 cents per share. I don’t know where Zacks got a 60 cent estimate but it is clear that the market expected better results. The problem appeared to be mostly expenses. Cash operating and G&A expenses were up $121MM. While margins per barrel were up, operating expenses per barrel ware $3.85 vs $3.46, while cost per barrel (including depreciation) was $5.61 vs $5.17. Crude throughput was down 1.4% versus last year, mostly in the west coast and a bit in mid-continent. (GC was up .6%). Ethanol operations were stronger than last year. The higher expenses and lower throughput were likely due to refinery turnarounds. This may bode well for next quarter. Exports in Q1 were 365mlb vs 387mlb last year. Biofuel blending costs (RINs) improved by $15MM but remain an area of concern. So color me disappointed but still optimistic.
CEO comments on RIN costs going forward depressing stock price today. Conference call and results mostly good. Hold tight.
Earning beat and we go down! Great! What am I missing?
Long Tall Texan
Fritz1967, as I recall, you follow Tom Kloza. What do you make of his comment in this CNBC interview, "It's the sense that too much gasoline and really a drop in U.S. demand in particular ... is going to lead to an undertow for refinery runs"?
The man who called crude’s collapse three years ago now sees this
Kloza sees oil largely remaining in its recent low- to mid-$50 range for some time.
Well, I guess they showed us. Thanks for nothing. If I loose money on this trade, I'm folding my cards and leaving the table, forever!
Bought some shares yesterday. Will buy more if it continues to dip.
omg what is going on with VLO. I can't believe it's just falling everyday.
API, after market closed on Tuesday, reported a fall of 840,000 barrels in U.S. crude supplies for the week ended April 14. The API data, however, also showed a climb of 1.4 million barrels in gasoline supplies, while inventories of distillates declined by 1.8 million barrels, Based on today's activity, I'm pretty sure that traders had this information sometime after 10 am this morning
Curious if anyone has done any research in regards to recycling flare gas at the rig sites. This will decrease diesel fuel consumption at the rig site to power the generators, as well as save all the miles necessary to truck the diesel out to the generators. These machines supposedly can act as a mobile refinery, separating out the different "thanes" from each other, reducing the need for refineries. I'm not as knowledgeable as some appear to be on here, so I was wondering if I was missing anything. It seems like if this is the wave of the future (lots of new oil being found in basins that are hard to resource on top of cost savings and "green" energy- machines supposedly leave 0 emissions) it could have a huge impact on the refinery segment.
Does anyone have any knowledge on this?
API late Tuesday reported a decline of 1.3 million barrels in U.S. crude supplies for the week ended April 7.. The API data also showed a drop of 3.7 million barrels in gasoline supplies and a fall of 1.6 million barrels in distillates.. Analysts had forecast an increase of 125,000 barrels in crude inventories but the oil price seemingly did not react to the unanticipated inventory decline. The fuel inventory numbers look good but I don't know what was forecasted.
Downside risk pretty much eliminated now that VLO has seen RSI reached the lower limits of 38.11. I started receiving notifications from awesomestock-s the other week and so far they have presented interesting new trade ideas.