Diesel Futures Jump 53% in Week, Fueling $64 Crack Spread for Valero
Ultra-low sulfur diesel futures surged 53% over seven days to around $4.00 per gallon, driving diesel crack spreads to approximately $64 per barrel and bolstering Valero Energy’s refining margins. During the third quarter, American Century Companies sold 379,162 Valero shares, trimming its stake by 72.4% to 144,530 shares.
1. Diesel Markets Surge
Ultra-low sulfur diesel front-month futures jumped roughly 53% in seven days, climbing to about $4.00 per gallon, the highest since June 2022. Strait of Hormuz closures and geopolitical tensions in Iran tightened global distillate supply, sending U.S. national average diesel prices to $4.656 per gallon.
2. Crack Spreads and Earnings Boost
With crude near $102 per barrel and diesel futures at $4.00 per gallon, the implied value of diesel approached $174 per barrel, expanding the diesel crack spread to around $64 per barrel. These elevated spreads, nearing record levels, stand to significantly enhance Valero Energy’s margins and quarterly earnings.
3. Major Stake Reduction
During the third quarter, American Century Companies sold 379,162 Valero shares, cutting its holding by 72.4% to 144,530 shares. This sizeable divestment may signal shifting institutional views and could influence Valero’s stock demand and performance.