$17.29
-0.28 (-1.59%)
Valero Energy Corp (VLO)
CAPS Rating:
The company owns and operates 18 refineries located in the United States, Canada, and Aruba that produce premium, environmentally clean refined products such as RBOB. It also produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals.
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Valero is a "merchant refiner." This means that it is not a fully integrated oil company with significant stake in proved oil reserves - rather, it is at the mercy of the marketplace for buying its crude feedstock. When refining margins are good, Valero does well. However, as crude oil prices rise faster than refined product prices, Valero gets caught in the squeeze. The general consensus among industry players is that we have turned the corner on world refining capacity - it is now more than required for world crude oil production. It would seem that the golden age of petroleum refining is gone. My money is going to the oil companies with the largest proven crude oil reserves.