How Are Valero’s Gasoline Crack Indicators Shaping Up in 2Q16?

Valero’s (VLO) gasoline crack indicators have started recovering in 2Q16 compared to 1Q16. In the North Atlantic, where VLO has 0.51 MMbpd (million barrels per day) refining capacity, VLO saw the largest rise in gasoline cracks of $4.70 per barrel over 1Q16, to $16.40 per barrel in 2Q16.

The US Gulf Coast (or USGC), which accounts for 1.7 MMbpd of VLO’s refining capacity, witnessed a $3.20 per barrel rise over 1Q16, to $11.20 per barrel in 2Q16. VLO’s total refining capacity stands at 3.0 MMbpd.

Valero’s peer Phillips 66 (PSX) also has exposure to USGC, where it has 0.74 MMbpd refining capacity of its total 2.2 MMbpd.

The Vanguard Energy ETF (VDE) has ~8% exposure to refining sector stocks.