Valero stock performance
In the previous article, we examined Valero Energy’s (VLO) refining margin expectation for the fourth quarter of 2018. Now, let’s review Valero’s stock performance before its fourth-quarter earnings results. The stock has risen marginally in the past month.
The rise in Valero stock could be the result of its improving refining crack conditions despite the rise in oil prices in the same period. WTI, the benchmark oil, has risen 2.7% since December 10, 2018.
In the current quarter, Valero’s refining margin indicators in the US Gulf Coast and North Atlantic have risen $0.1 per barrel and $0.3 per barrel, respectively, over the previous quarter. The US Gulf Coast and North Atlantic refining margin indicators are $9.6 per barrel and $9.3 per barrel, respectively, in the first quarter so far, indicating the likelihood of better refining margins for Valero in these regions in the current quarter.
However, RIN (renewable identification number) prices have reversed their downtrend in the current quarter. Ethanol RIN prices have risen 66% over the fourth quarter of 2018 to 21.8 cents per gallon in the first quarter of 2019 so far. In the same period, biodiesel RINs have increased 44% sequentially to 57.3 cents per gallon.
Valero compared to its peers
Overall, Valero stock has risen 5.3% since December 10. In the same period, the SPDR S&P 500 ETF (SPY), the broader market indicator, has fallen 2.3%. VLO’s peers Marathon Petroleum (MPC), Phillips 66 (PSX), and PBF Energy (PBF) have risen 5.3%, 3.5%, and 5.5%, respectively.
In the next article, we’ll look at analysts’ estimates for Valero’s dividend payment in the first quarter of 2019.