Engineering News

Valero Wins Aviation Fuel Contract
Thursday August 13, 2009, 10:55 am EDT

Yesterday, Valero Marketing and Supply Co., a subsidiary of oil refiner and marketer Valero Energy Corp., won an aviation fuel supply contract worth up to $230.5 million from the U.S. Defense Logistics Agency. The Pentagon said that Valero will provide the fuel to the Defense Energy Support Center, which manages bulk fuel purchases on behalf of the U.S. Department of Defense. The contract, which ends on Oct 30, 2010, will require Valero to ship the fuel from its 170,000 barrel-per-day refinery in Benicia, California.

We view this contract as a positive for Valero as this will bring much needed cash flows for the company in an otherwise gloomy economic environment. However, a combination of weak demand, excess production capacity, and narrowing crude quality spreads continue to weigh on Valero’s near-term margins, thereby squeezing its profits. Weighed down by these factors, the Texas-based marketer of petroleum products posted a second-quarter loss.

We see limited room for margin gains over the coming months, given the current gasoline and distillate inventory levels and the overall low utilization rate. Given these headwinds, we expect Valero to perform in-line with the market as well as the sector in the coming quarters. As such, we recommend a Neutral rating for Valero shares.

Source: Zacks Equity Research

Engineering News Archive

 
// CAREER RESOURCES

Applicant Procedures
Job Seekers
Resume Help
Professional Organizations
Engineering Career Information
Engineering Colleges

// WHAT WE DO
Recruiters for
Professionals in the Chemical
& Pharmaceutical Industries
We recruit exclusively for Engineers and Operations/Maintenance Management Personnel in the following areas:
Specialty chemicals
Bulk chemicals
Commodity Chemicals
Petrochemicals
Fine chemicals
Agrochemicals
Industrial gases
Surfactants
Fertilizers
Solvents
Coatings
Polymers
Pharmaceuticals
Refinery
Career Center | FAQs | Privacy
SESI Corporate Headquarters (954)755-3121 ext 109
© Search Enterprises, Inc. All rights reserved.
Submit a Job About Search Enterprises Submit a Resume Candidates Job Opportunities Search Enterprises Home