Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Valero Energy Corporation    VLO

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

Valero Energy : Biofuel blending costs soar for Valero

share with twitter share with LinkedIn share with facebook
share via e-mail
0
09/13/2016 | 03:38am CEST

Independent refiner Valero Energy Corp. said its biofuel blending costs more than tripled to $173 million (157m) for the second quarter of 2016, primarily due to its purchase of Renewable Identification Numbers (RIN) credits.

The group announced the statement in its second-quarter 2016 results.

The US-based RFS programme requires oil refiners and importers to blend more renewable fuel or buy paper credits in an opaque market. Compliance credits to meet the standards, known as RINs, were about 25% higher in the second quarter than a year earlier.

Background

To increase the amount of biofuels in gasoline, the Renewable Fuel Standard (RFS) administered by the Environmental Protection Agency (EPA) was enacted through laws passed in 2005 and 2007.

Today, around 10% of fuel sold as motor gasoline is corn-based ethanol. RIN and Renewable Volume Obligations (RVO) are the mechanisms the EPA uses to implement the RFS program. RVOs are the targets for each refiner or importer of petroleum-based gasoline or diesel fuel, while RINs allow for flexibility in how each of them may choose to comply.

Soaring biofuel blending costs

In its second-quarter results statement, Valero said its refining segment reported $1.3 billion of operating income ($954 million of adjusted operating income) for the second quarter of 2016, compared to $2.2 billion of operating income for the second quarter of 2015.

The decline was primarily attributable to weaker gasoline and distillate margins. Other factors included narrower sweet crude oil discounts relative to the Brent benchmark and higher costs to meet our biofuel blending obligations (primarily for the purchase of RINs).

Biofuel blending costs were $173 million in the second quarter of 2016, which was $117 million higher than the second quarter of 2015. Valero continues to expect such costs to be between $750 million and $850 million for 2016.

Ethanol results

Elsewhere, Valeros ethanol segment reported $69 million of operating income ($49 million of adjusted operating income) for the second quarter of 2016 compared to $108 million of operating income for the second quarter of 2015.

Ethanol production volumes averaged 3.8 million gallons per day in the second quarter of 2016, which was consistent with the second quarter of 2015. Valero said expects ethanol demand to remain strong given high gasoline demand in the US and attractive economics for corn-based ethanol exports.

Profit drop

Overall profits for Valero plunged 40% in the second quarter as a glut of petroleum products weighs on prices and trims margins.

Valero reported net income of $814 million, down from $1.4 billion in the second quarter of 2015. Earnings per share fell to $1.73 from $2.66. Second-quarter revenue fell more then 20%, to $19.6 billion from $25.1 billion in 2016.

Valero chief executive Joe Gorder acknowledged a challenging earnings environment, but said the company was encouraged by strong demand for refined products in the US and globally, as well as low prices of crude oil, the feed stock for refiners. US demand for gasoline is at record highs, but inventories also have grown as refiners produced gasoline at even faster rates.

(c) All rights reserved The Jerusalem Post 1995 - 2016 Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on VALERO ENERGY CORPORATION
08/23 VALERO ENERGY : Technical Insights on Oil & Gas Stocks -- HollyFrontier, Maratho..
08/21 Special Report - Refiner Valero's secret campaign against U.S. biofuels manda..
08/11 VALERO ENERGY CORPORATION : to Participate in the Barclays CEO Energy-Power Conf..
08/10 Valero Energy Corporation to Participate in the Barclays CEO Energy-Power Con..
08/07 VALERO ENERGY COR : TX MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITI..
08/07 VALERO ENERGY CORPORATION : ex-dividend day
08/05 VALERO ENERGY : Whitacre College of Engineering Unveils Plans for Valero Experie..
08/04 VALERO ENERGY CORPORATION : Dividend Coverage: This Petroleum Refining and Ethan..
08/03 Valero Signs Long-Term Agreements to Import Refined Products into Central Mex..
08/02 EXCLUSIVE : Venezuelan oil supply to Phillips 66 falls amid quality issues
More news
News from SeekingAlpha
08/23 Texas refining industry on watch for possible hurricane
08/23 Icahn's Resignation Signals A Return To The Status Quo For The Biofuels Manda..
08/23 Valero Energy Isn't Just Sitting Around
08/21 REUTERS : Valero quietly lobbies against U.S. biofuels credit mandates
08/21 S&P 500 'Safer' Dividend Dog Net Gains Led By Navient Per August One-Year Bro..
Financials ($)
Sales 2017 81 225 M
EBIT 2017 3 093 M
Net income 2017 1 811 M
Debt 2017 3 830 M
Yield 2017 4,28%
P/E ratio 2017 16,24
P/E ratio 2018 11,80
EV / Sales 2017 0,40x
EV / Sales 2018 0,42x
Capitalization 28 964 M
Chart VALERO ENERGY CORPORATION
Duration : Period :
Valero Energy Corporation Technical Analysis Chart | VLO | US91913Y1001 | 4-Traders
Technical analysis trends VALERO ENERGY CORPORATION
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 72,4 $
Spread / Average Target 10%
EPS Revisions
Managers
NameTitle
Joseph W. Gorder Chairman, President & Chief Executive Officer
R. Lane Riggs EVP-Refining Operations & Engineering
Michael S. Ciskowski CFO, Principal Accounting Officer & EVP
Cheryl Thomas Chief Information Officer & Vice President
Susan Kaufman Purcell Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
VALERO ENERGY CORPORATION-4.01%28 964
EXXON MOBIL CORPORATION-15.38%325 156
BP-13.23%112 665
CHINA PETROLEUM & CHEMICAL CORP11.28%104 608
RELIANCE INDUSTRIES LIMITED45.85%79 105
SAUDI BASIC INDUSTRIES CORPORATION SJSC--.--%78 728