Valero Energy (VLO) Lobbies Against Lifting Export Ban, While Sending Oil to Canada
Shares of Valero Energy Corporation (VLO) were trading up +3.60 or +5.48 percent in Friday’s premarket after news that the company was actively lobbying to support a longstanding ban on crude oil exports while taking advantage of an exception which allows the company to ship U.S. oil to its refinery in Quebec, Canada. Valero Energy stock closed at $65.71 per share, up +1.12 or +1.73 percent in Thursday’s regular trading session.
Originally a spinoff of Coastal States Gas Corporation, Valero Energy Corporation was created in 1980 with Coastal States’ LoVaca Gathering Company natural gas subsidiary.
Later today, the U.S. House of Representatives will vote to lift a 40 year old ban on crude oil exports. According to the author of the bill, Representative Joe Barton, the ban was designed to prevent oil shortages such as those in the 1970s that have no relevance today. President Obama has threatened to veto the bill should it pass. Valero and other oil companies have been actively lobbying in support of the 40 year old ban.
The legislation to be voted on would end current restrictions on oil exports, allowing the president to halt exports amid “unusual and extraordinary” circumstances such as national security threats or foreign policy reasons. The House will vote on 10 amendments including an unrelated provision authorizing an additional $500 million in payments for U.S. flag ships that allow their use by the U.S. Defense Department during an emergency.
Supporters of the bill to end the ban argue that the bill is unfair; they point to Valero’s taking advantage of an exception that allows the company to ship oil to its refinery in Canada, as evidence that the current trade restrictions are unfair. Nevertheless, Valero stresses that its transactions are consistent with the current policy which allows limited crude exports.
Bill Day, a Valero spokesman said that the current policy is working, so “why change it?” adding “We went through that exact same (licensing) process everyone else can go through, do we need unlimited crude exports when you have a process in place to export crude?” Valero is joined in its opposition to lifting the ban by Monroe Energy, Philadelphia Energy Solutions and Alon USA among others.
Investors view the news as favorable, bidding up Valero Energy stock up almost two percent in yesterday’s regular session and adding an additional five percent in this morning’s premarket. With this morning’s gains, the stock is within a couple of points from its yearly high of $71.50 per share and could test the level later in today’s session considering that crude has risen above the $50 per barrel handle.
Other News About VLO
Can Valero Energy (VLP) Keep the Earnings Streak Alive This Quarter?
Zacks research article on Valero’s upcoming earnings report.
Valero Energy Corp. breached its 50 day moving average in a Bullish Manner : October 5, 2015
Technical outlook on Valero Energy shares.
Other Stocks in the News
Standard Chartered to slash 1,000 top jobs
Bank plans to reduce costs, cutting a quarter of senior staff members including board members and managing directors.
Apple removes some apps from online store over security concerns
Company removes “a few” apps from its store which Apple believed could compromise user’s personal data in certain circumstances.