Surging Diesel Prices Boost Refiners' Profits
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 11 hours ago
0mins
Source: Fool
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 per gallon in January to $5.382, a 59% increase, significantly benefiting independent refiners like Valero and Phillips 66, reflecting strong market demand and supply constraints.
- Valero's Strong Financials: Valero's stock has risen 39% this year and over 105% in the past year, with adjusted net income per share reaching $10.61 in 2025, a 25% increase, demonstrating the company's profitability and competitive edge in a high diesel price environment.
- Phillips 66 Diversification Strategy: Phillips 66 has successfully transformed into a midstream-focused company through acquisitions like DCP Midstream and EPIC NGL, providing more stable cash flow, with adjusted EPS of $6.44 in 2025, up 4.7%, indicating financial robustness.
- Renewable Energy Investment Outlook: Both companies are investing in renewable fuels, with Valero being the largest renewable diesel producer in North America and Phillips 66 converting its San Francisco refinery into a renewable diesel and sustainable aviation fuel facility, signaling their leadership in the energy transition.
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Analyst Views on VLO
Wall Street analysts forecast VLO stock price to fall
17 Analyst Rating
11 Buy
6 Hold
0 Sell
Moderate Buy
Current: 223.650
Low
149.00
Averages
186.56
High
223.00
Current: 223.650
Low
149.00
Averages
186.56
High
223.00
About VLO
Valero Energy Corporation, through its subsidiaries, is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. The Company sells its products primarily in the United States, Canada, the United Kingdom, Ireland and Latin America. Its segments include Refining, Renewable Diesel, and Ethanol. The Refining segment includes the operations of its petroleum refineries, the associated activities to market its refined petroleum products, and the logistics assets that support its refining operations. The Renewable Diesel segment represents the operations of Diamond Green Diesel (DGD), and the associated activities to market renewable diesel, renewable naphtha, and neat SAF. The Ethanol segment includes the operations of its ethanol plants and the associated activities to market its ethanol and co-products. It owns 15 petroleum refineries located in the United States, Canada and the United Kingdom.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Surging Diesel Prices Boost Refiners' Profits
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 per gallon in January to $5.382, a 59% increase, significantly benefiting independent refiners like Valero and Phillips 66, reflecting strong market demand and supply constraints.
- Valero's Strong Financials: Valero's stock has risen 39% this year and over 105% in the past year, with adjusted net income per share reaching $10.61 in 2025, a 25% increase, demonstrating the company's profitability and competitive edge in a high diesel price environment.
- Phillips 66 Diversification Strategy: Phillips 66 has successfully transformed into a midstream-focused company through acquisitions like DCP Midstream and EPIC NGL, providing more stable cash flow, with adjusted EPS of $6.44 in 2025, up 4.7%, indicating financial robustness.
- Renewable Energy Investment Outlook: Both companies are investing in renewable fuels, with Valero being the largest renewable diesel producer in North America and Phillips 66 converting its San Francisco refinery into a renewable diesel and sustainable aviation fuel facility, signaling their leadership in the energy transition.
See More
Valero Energy and Phillips 66 Shares Surge Amid Diesel Price Spike
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 to $5.382 per gallon in just weeks, a 59% increase that benefits independent refiners like Valero and Phillips 66, further driving their stock prices upward.
- Valero's Strong Performance: Valero reported an adjusted EPS of $10.61 for 2025, a 25% increase year-over-year, with refinery utilization rates exceeding 96%, significantly above industry averages, showcasing its competitive edge in the market.
- Phillips 66's Diversified Revenue: By acquiring DCP Midstream and EPIC NGL, Phillips 66 has successfully transformed its business model, establishing a more stable natural gas liquids operation that is expected to provide steady cash flow and enhance its risk resilience.
- Dividend Growth and Buybacks: Both Valero and Phillips 66 have increased their dividends by 100% and 101% over the past decade, respectively, and are actively repurchasing shares, which boosts investor confidence and shareholder returns.
See More
Diesel Prices Surge, Refiners Stand to Gain
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 to $5.382 per gallon in just weeks, a 59% increase that benefits refiners like Valero Energy and Phillips 66 through higher crack spreads, enhancing their profitability.
- Valero's Strong Financials: Valero's stock has risen 39% this year and over 105% in the past year, with an adjusted EPS of $10.61 for 2025, reflecting a 25% increase, indicating robust financial health even before the diesel price surge.
- Phillips 66 Diversification Strategy: Phillips 66 has successfully transitioned into midstream operations through acquisitions like DCP Midstream and EPIC NGL, providing more stable cash flow, and has converted its San Francisco refinery into a major renewable diesel and sustainable aviation fuel facility, positioning itself as a leader in the energy transition.
- Consistent Shareholder Returns: Both Valero and Phillips 66 have increased dividends over the past decade, with Valero raising its dividend by 6.2% to $1.20 per quarter and Phillips 66 by 5.8% to $1.27, demonstrating their commitment to shareholders and financial stability.
See More
Jim Cramer Discusses Valero Energy Stock Insights
- Stock Performance: Valero Energy Corporation (NYSE:VLO) has seen its shares rise by 119% over the past year and 46% year-to-date, indicating strong market performance and investor confidence in its growth potential.
- Analyst Rating Upgrade: Piper Sandler raised Valero's price target from $236 to $263 on April 8 while maintaining an Overweight rating, acknowledging potential headwinds in 2026 but remaining optimistic about its long-term outlook.
- Market Environment Impact: Goldman Sachs upgraded Valero's price target from $203 to $237 on March 12, maintaining a Buy rating, reflecting a sector upgrade in the wake of hostilities in Iran, indicating a reassessment of energy stocks.
- Investment Recommendation: Jim Cramer emphasized that despite uncertainties, Valero remains a compelling investment choice, particularly in the current market environment, suggesting it as a potential winner in the refining sector.
See More
US Stocks Surge as Oil Prices Plunge Amid Peace Talks
- Market Rally: The S&P 500 rose 1.20% and the Nasdaq 100 increased by 1.29%, reaching all-time highs, reflecting investor optimism regarding US-Iran peace talks, which may enhance risk appetite in the markets.
- Oil Price Plunge: WTI crude prices fell over 11% to a five-week low after Iran announced the Strait of Hormuz is fully open, easing inflation concerns and causing the 10-year T-note yield to drop 7 basis points to 4.24%.
- Strong Earnings Season: The earnings season started robustly, with 81% of the 48 S&P 500 companies reporting Q1 earnings exceeding estimates, projecting a 12% year-over-year increase in earnings, providing strong support for the stock market.
- Airline Stocks Surge: Airline stocks surged as fuel costs decreased, with Alaska Air Group (ALK) rising over 10% and Royal Caribbean Cruises Ltd (RCL) up more than 7%, indicating market confidence in the recovery of the airline industry.
See More
Exxon Mobil and Valero Options Trading Activity Surges
- Exxon Mobil Options Volume: As of now, Exxon Mobil (XOM) options have reached a trading volume of 137,720 contracts, equivalent to approximately 13.8 million shares, representing 53.9% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Volume Call Options: Within XOM, the $145 strike call option is particularly active, with 20,824 contracts traded today, representing about 2.1 million shares, reflecting investor expectations for future price increases.
- Valero Options Activity: Valero Energy (VLO) options show a trading volume of 23,122 contracts, approximately 2.3 million shares, accounting for 52.9% of its average daily trading volume over the past month, indicating rising market interest in its stock.
- Surge in Call Options Trading: For VLO, the $270 strike call option has seen a trading volume of 3,743 contracts, about 374,300 shares, suggesting that investors are optimistic about the stock's future performance, potentially driving its price higher.
See More
Surging Diesel Prices Boost Refiners' Profits
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 per gallon in January to $5.382, a 59% increase, significantly benefiting independent refiners like Valero and Phillips 66, reflecting strong market demand and supply constraints.
- Valero's Strong Financials: Valero's stock has risen 39% this year and over 105% in the past year, with adjusted net income per share reaching $10.61 in 2025, a 25% increase, demonstrating the company's profitability and competitive edge in a high diesel price environment.
- Phillips 66 Diversification Strategy: Phillips 66 has successfully transformed into a midstream-focused company through acquisitions like DCP Midstream and EPIC NGL, providing more stable cash flow, with adjusted EPS of $6.44 in 2025, up 4.7%, indicating financial robustness.
- Renewable Energy Investment Outlook: Both companies are investing in renewable fuels, with Valero being the largest renewable diesel producer in North America and Phillips 66 converting its San Francisco refinery into a renewable diesel and sustainable aviation fuel facility, signaling their leadership in the energy transition.
See More
Valero Energy and Phillips 66 Shares Surge Amid Diesel Price Spike
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 to $5.382 per gallon in just weeks, a 59% increase that benefits independent refiners like Valero and Phillips 66, further driving their stock prices upward.
- Valero's Strong Performance: Valero reported an adjusted EPS of $10.61 for 2025, a 25% increase year-over-year, with refinery utilization rates exceeding 96%, significantly above industry averages, showcasing its competitive edge in the market.
- Phillips 66's Diversified Revenue: By acquiring DCP Midstream and EPIC NGL, Phillips 66 has successfully transformed its business model, establishing a more stable natural gas liquids operation that is expected to provide steady cash flow and enhance its risk resilience.
- Dividend Growth and Buybacks: Both Valero and Phillips 66 have increased their dividends by 100% and 101% over the past decade, respectively, and are actively repurchasing shares, which boosts investor confidence and shareholder returns.
See More
Diesel Prices Surge, Refiners Stand to Gain
- Diesel Price Surge: Diesel prices have skyrocketed from $3.365 to $5.382 per gallon in just weeks, a 59% increase that benefits refiners like Valero Energy and Phillips 66 through higher crack spreads, enhancing their profitability.
- Valero's Strong Financials: Valero's stock has risen 39% this year and over 105% in the past year, with an adjusted EPS of $10.61 for 2025, reflecting a 25% increase, indicating robust financial health even before the diesel price surge.
- Phillips 66 Diversification Strategy: Phillips 66 has successfully transitioned into midstream operations through acquisitions like DCP Midstream and EPIC NGL, providing more stable cash flow, and has converted its San Francisco refinery into a major renewable diesel and sustainable aviation fuel facility, positioning itself as a leader in the energy transition.
- Consistent Shareholder Returns: Both Valero and Phillips 66 have increased dividends over the past decade, with Valero raising its dividend by 6.2% to $1.20 per quarter and Phillips 66 by 5.8% to $1.27, demonstrating their commitment to shareholders and financial stability.
See More
Jim Cramer Discusses Valero Energy Stock Insights
- Stock Performance: Valero Energy Corporation (NYSE:VLO) has seen its shares rise by 119% over the past year and 46% year-to-date, indicating strong market performance and investor confidence in its growth potential.
- Analyst Rating Upgrade: Piper Sandler raised Valero's price target from $236 to $263 on April 8 while maintaining an Overweight rating, acknowledging potential headwinds in 2026 but remaining optimistic about its long-term outlook.
- Market Environment Impact: Goldman Sachs upgraded Valero's price target from $203 to $237 on March 12, maintaining a Buy rating, reflecting a sector upgrade in the wake of hostilities in Iran, indicating a reassessment of energy stocks.
- Investment Recommendation: Jim Cramer emphasized that despite uncertainties, Valero remains a compelling investment choice, particularly in the current market environment, suggesting it as a potential winner in the refining sector.
See More
US Stocks Surge as Oil Prices Plunge Amid Peace Talks
- Market Rally: The S&P 500 rose 1.20% and the Nasdaq 100 increased by 1.29%, reaching all-time highs, reflecting investor optimism regarding US-Iran peace talks, which may enhance risk appetite in the markets.
- Oil Price Plunge: WTI crude prices fell over 11% to a five-week low after Iran announced the Strait of Hormuz is fully open, easing inflation concerns and causing the 10-year T-note yield to drop 7 basis points to 4.24%.
- Strong Earnings Season: The earnings season started robustly, with 81% of the 48 S&P 500 companies reporting Q1 earnings exceeding estimates, projecting a 12% year-over-year increase in earnings, providing strong support for the stock market.
- Airline Stocks Surge: Airline stocks surged as fuel costs decreased, with Alaska Air Group (ALK) rising over 10% and Royal Caribbean Cruises Ltd (RCL) up more than 7%, indicating market confidence in the recovery of the airline industry.
See More
Exxon Mobil and Valero Options Trading Activity Surges
- Exxon Mobil Options Volume: As of now, Exxon Mobil (XOM) options have reached a trading volume of 137,720 contracts, equivalent to approximately 13.8 million shares, representing 53.9% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Volume Call Options: Within XOM, the $145 strike call option is particularly active, with 20,824 contracts traded today, representing about 2.1 million shares, reflecting investor expectations for future price increases.
- Valero Options Activity: Valero Energy (VLO) options show a trading volume of 23,122 contracts, approximately 2.3 million shares, accounting for 52.9% of its average daily trading volume over the past month, indicating rising market interest in its stock.
- Surge in Call Options Trading: For VLO, the $270 strike call option has seen a trading volume of 3,743 contracts, about 374,300 shares, suggesting that investors are optimistic about the stock's future performance, potentially driving its price higher.
See More
