Tesoro Stock on the Move in 2Q17: What's Driving It?

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Tesoro Stock on the Move in 2Q17: What's Driving It? PART 1 OF 11

Tesoro Outperforms SPY in 2Q17: What Is Driving the Stock?

Tesoro’s stock performance

Since April 3, 2017, Tesoro (TSO) stock has risen 13%, outperforming the market indicator, the SPDR S&P 500 ETF (SPY). SPY has risen 3% in the same period.

TSO’s peers Marathon Petroleum (MPC) and Phillips 66 (PSX) have risen 4% and 1%, respectively, since April 3. Valero Energy (VLO) has fallen 2% in the quarter so far.

Tesoro Outperforms SPY in 2Q17: What Is Driving the Stock?

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Tesoro stock rises in 2Q17

Numerous factors impact refining stocks, including geographical cracks, spreads, and refined product inventory levels in the market. As in 2016, downstream stocks have had a variable performance due to the volatile crack conditions and oscillating inventory levels.

In 2Q17, Tesoro stock has been rising. In the second quarter, Tesoro’s refining index values are increasing year-over-year as well as quarter-over-quarter. This can result in a higher refining margin for 2Q17.

In 2Q17, Tesoro (TSO) completed the acquisition of Western Refining, a move that could bring significant benefits in terms of higher capacity and operational synergies. For more on this topic, you can read Tesoro Completes WNR Acquisition: A Post-1Q17 Update.

On May 8, Tesoro posted its 1Q17 earnings, which surpassed analysts’ consensus estimates, driving up the stock.

However, in June, the EIA (U.S. Energy Information Administration) reported a rise in gasoline inventory levels for the week ended June 9, 2017. However, gasoline demand is expected to increase this summer due to an increase in the number of US travelers.

In short…

Tesoro stock has outperformed SPY likely due to higher TSO index values, the completion of the Western Refining acquisition, better 1Q17 numbers, and the expectation of high gasoline demand this summer.

In this series, we’ll provide an update on TSO’s market performance in 2Q17 so far. In the next few parts, we’ll consider Tesoro’s moving averages and nine-day price forecast based on its implied volatility.

We’ll also examine analysts’ ratings for Tesoro followed by TSO’s dividend yield, institutional ownership status, forward valuations, PEG ratio comparisons, and short interest changes. We’ll wrap up the series by looking at changes in Tesoro stock’s correlation to crude oil in the past one-month period.

In the next part, we’ll look at the moving averages for Tesoro stock.


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