What Movements Did Valero’s Diesel Crack Indicators See in 4Q16?



Valero’s diesel crack indicators

Valero Energy’s (VLO) diesel crack indicators put up mixed performances in 4Q16 compared to 3Q16. The US West Coast (or USWC), where VLO has 0.3 MMbpd (million barrels per day) worth of refining capacity, saw a rise of $2.5 per barrel over 3Q16 to $17.3 per barrel in 4Q16.

The US Gulf Coast (or USGC), which makes up 1.7 MMbpd of VLO’s refining capacity, witnessed a rise of $2.2 per barrel in its diesel crack over 3Q16 to $12.8 per barrel in 4Q16.

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Peer refining capacity

Valero’s peer Marathon Petroleum (MPC) also has exposure to USGC. MPC has ~1 MMbpd worth of refining capacity in USGC of its total 1.8 MMbpd of refining capacity.

For exposure to refining and marketing sector stocks, you can consider the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). The ETF has ~16% exposure to the sector.


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