- The surging price of gasoline has created a black cloud over the U.S. economy, partially causing consumer sentiment to fall to a record low.
- Top petroleum refiners such as Valero have been great gasoline hedges, with VLO rising over 80% this year.
- Valero's expected 2022 profits have soared as low petroleum product inventories and increased import demands in Europe have caused the RBOB "crack spread" to rise to an extreme high.
- While Valero's short-term outlook is excellent, it seems highly unlikely the spread between gasoline and crude oil will remain as strong as it is.
- The slowing economy and the potential for western leaders to re-think their strategy with Russia may significantly impair Valero's recent gains.
For further details see:
Valero Is Overvalued As Crack Spreads Are Unlikely To Sustain Extreme Highs