Valero Prepares for Tropical Storms With Refinery Shutdown
Valero Energy Corporation VLO intends to shut its fluidic catalytic cracker (FCC) and small crude distillation plant, per Reuters. The units to be shut, before two tropical storms make landfall on the Gulf Coast, are located at the company’s Port Arthur, Texas, refinery. The refinery has a capacity to refine 335,000 barrel of liquid per day.
To brave the storms, Valero Energy has changed its plan abruptly by halting the restart of its 100,000 barrel per day capacity coker unit and is instead planning a partial shutdown of the refinery, according to the report. Reportedly, Exxon Mobil Corporation XOM might shut its Beaumont refinery, which has a refining capacity of 369,000 Bbl per day.
Notably, the Gulf coast region is reportedly responsible for more than 15% of oil production in the United States. Moreover, almost half of America’s oil refineries are centred in the Gulf Coast. Thus, a temporary closure of the facilities will weigh on the commodity’s supply and lead to a surge in oil and gasoline prices. However, this price surge is going to be short-lived since global fuel demand has been battered by the coronavirus pandemic.
Valero Energy Corporation Price
Headquartered in San Antonio, TX, Valero Energy currently carries a Zacks Rank #4 (Sell). Meanwhile, two better-ranked players in the energy space are Concho Resources Inc. CXO and EOG Resources, Inc. EOG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Concho is likely to see earnings growth of 21.6% in 2020.
EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.
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