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Valero Energy Stock a Month before the Earnings Release

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Valero stock performance

In the previous part of this series, we examined Valero Energy’s (VLO) refining margin expectation for the third quarter of 2018. Now we’ll look at the stock and see why it has risen marginally in the past month.

Refining conditions seem to be improving over the last month. Refining margin indicators have risen in two of Valero’s four operating regions, despite the rise in oil prices. WTI, the benchmark oil, has increased 8.2% since September 5.

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Valero’s refining margin indicators in the US Midcontinent and the US West Coast rose $1.10 per barrel and $1.80 per barrel, respectively, in the week ended September 3. They were $20.30 per barrel and $17.90 per barrel, respectively, in the week ended September 24. That means better refining margins in these regions in the last month.

RIN (Renewable Identification Number) prices have continued their downward spiral in the past month. Ethanol RIN prices declined 36% in the week ended September 3 to 13.7 cents per gallon in the week ended September 24. In that period, Biodiesel RIN prices fell 18% to 34.4 cents per gallon.

Valero stock compared to its peers

Valero stock has risen 0.3% since September 5. In that same period, the SPDR S&P 500 ETF (SPY), the broader market indicator, has risen 0.1%. VLO’s peers Marathon Petroleum (MPC) and PBF Energy (PBF) have risen 1.6% and 1.1%, respectively.

In the next part, we’ll look at analysts’ estimate for Valero’s dividend payment in the fourth quarter of 2018.

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