Valero (VLO) Makes First Venezuelan Crude Purchase at $9.50 Discount
Written by Emily J. Thompson, Senior Investment Analyst
Source: seekingalpha
- First Transactions: Valero (VLO) and Phillips 66 (PSX) have made their initial purchases of Venezuelan crude oil from trading house Vitol, marking a significant step for U.S. Gulf Coast refiners under Washington's agreement with Caracas to potentially export up to 50 million barrels.
- Price Discount: The crude oil was traded at a discount of approximately $8.50 to $9.50 per barrel compared to Brent crude (CO1:COM), indicating strong demand and competitive pricing for Venezuelan oil in the current market.
- Market Dynamics: Vitol and Trafigura acquired Venezuelan oil at a $15 per barrel discount to the global Brent benchmark, reflecting a growing interest in the region's crude and providing U.S. refiners with more attractive procurement options.
- Industry Impact: This transaction not only represents the first direct purchases of Venezuelan crude by Valero and Phillips 66 from trading houses but may also encourage other U.S. refiners to follow suit, potentially reshaping the U.S. dependency on Venezuelan oil.
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Analyst Views on VLO
Wall Street analysts forecast VLO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for VLO is 186.56 USD with a low forecast of 149.00 USD and a high forecast of 223.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
11 Buy
6 Hold
0 Sell
Moderate Buy
Current: 184.020
Low
149.00
Averages
186.56
High
223.00
Current: 184.020
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.
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