ipl-logo

Chevron Essay

978 Words4 Pages

Chevron Corporation Downstream The year 2015 was a year of margin contrast in the oil and gas industry. While it was a terrible year for the upstream companies due to the sharp fall in crude oil and natural gas prices, it was a year of strong margins for the downstream companies like Valero (VLO) and Phillips 66 (PSX) for the same reason. The glut of crude bringing down input prices for these firms while continued stable demand for gasoline and diesel has led to better crack spreads. The crack spread refers to the profit per barrel of oil that refiners earn from turning oil into finished products like gasoline, diesel, and jet fuel. But that was the reality of the last year only. This year hasn’t started up that well for the downstream business …show more content…

In 2017, jet fuel consumption is projected to rise by 20,000 b/d (1.0 %). The forecast distillate consumption could grow by an average of 60,000 b/d (1.6%) per year over the next two years. The production cut by major refiners like Monroe Energy (10 %) and Valero Energy Corp (25 %) will also help in bringing down the stockpiles at the refineries. Hence, the slump in prices of these products is soon to get reversed as shown in the above figures. We can also see that crude oil prices are not going to rise back at the same pace as the product prices are. Thus we should expect the margins at the downstream business widen again. Therefore, Chevron is very well placed to take good advantage of an increase in refining margins, as it has increased its downstream capacity. The company is now the largest producer of base oils, products that have got great future prospects as shown below: Additionally, the company is prepared to cater to the soaring gasoline demand in the Asia-Pacific region after upgrading its Singapore refinery by constructing a cogeneration plant and a gasoline desulfurization facility. This product dictates high margins which would bolster the overall downstream margins of the

Show More
Related

  • The Pros And Cons Of The Keystone Pipeline

    1437 Words  | 6 Pages

    Because of the price for gasoline has gone down, but if the U.S does not build the Keystone pipeline, the economic stability that it would provide will happen and thus will cause gas prices to rise. The Keystone alone will not pump in all the oil that would be need to support the U.S. However the Pipeline will add 9.4 million barrels of oil per day. When taken in for account the number of cars, planes, trucks; and other oil powered machinery that are in use in the U.S today, it would not equal up to what the U.S needs. 19.11 million barrels of oil used per day in the Americas

    Read More

  • The Pros And Cons Of Keystone Pipeline XL

    2524 Words  | 11 Pages

    Another misconception is that all of the oil the United States produces, now and in the future, is mostly exported. The truth is, “The United States consumes the vast majority of its refined products The claim that ‘much of this oil is for export’ is actually contrary to the facts, market analysis and what actual refiners and customers of Keystone XL have said. The fact is the U.S. consumes the vast majority of all the refined products it produces. In 2012, only about 9% of U.S. refined on-road motor fuel was exported – the other 91 per cent was consumed in the United States first.”

    Read More

  • Summary Of Dark Money By Jane Mayer

    580 Words  | 3 Pages

    ( This resulted in the firing of their brother Bill by the company's board and paved the way for Charles and David to buy out their brothers share in the company. Moreover, in 1983 Charles and David succeeded in acquiring the entirety of their brothers shares for approximately 1.1 billion dollars. However, Bill and Fred entered years of battle in court with their brothers under the belief that their brothers undersold the company to them when buying their shares. The main focus for this was The Pine Bend Refinery which was the company's single largest producer of crude oil. Consequently, Frederick, “...Refused to speak to Charles for the rest of his life,” and took Bill decades to gradually rebuild his relationship with his brothers.

    Read More

  • Husky Energy Case Study

    79 Words  | 1 Pages

    Analyzed Husky Energy financial position and performance using its financial statements for a 10 period and benchmarked Husky Energy to the top 5 oil production companies in Canada, while comparing them to the entire Industry averages. We also researched Husky Energy new ventures and whether the current drop in oil price has increased or decreased oil production. And we concluded by evaluating how the innovative technology of the automobile industry may cause future decline in fuel and diesel consumption.

    Read More

  • Why Did Rockefeller Become The Wealthiest Man In American History

    1300 Words  | 6 Pages

    The second category focuses on lowering the average costs of production within the boundaries of the company. Lowering average costs with cooperation with other companies, the main companies Standard Oil co-operated within railway companies that transported Standard Oil kerosene. “Using its large and growing volume of oil shipments to negotiate an alliance with the railroads that gave it secret rebates and thereby

    Read More

  • Essay On Louisiana Coast

    711 Words  | 3 Pages

    Although there has been a delay in oil and gas production in recent years, continuous state is an important substance in the US petrochemical industry. Of the US $ 747 billion in domestic refined oil production, US $ 71 billion (9.5% of all domestic production) is attributed to coastal

    Read More

  • Summary: Share Of EOG Resources

    941 Words  | 4 Pages

    These premium locations are able to generate strong returns in a low commodity price environment. The shale player expects these wells to generate after-tax rates of return of 30% or better at $40 oil and more than 100% after-tax rates return at $60 oil. Therefore, these premium locations should enormously improve its performance when oil price starts improving and create value for its shareholders. This becomes evident as the company has identified about 3200 locations with approximately 2 billion barrels of oil equivalent of inventory at its premium locations for the next 12 years. The snapshot below shows its premium locations and rate of return at oil price in the bracket of $40 and $50 per

    Read More

  • Finance Case Study: The Wilkerson Company

    895 Words  | 4 Pages

    The pumps that the Wilkerson company produces are the “bread and butter” of this company. These products are produced at a high rate with a high price competition. As stated earlier, due to the severe price cutting by the competitors, the pre- tax margin of the company dropped extremely low to 3% percent and gross margin to 19.5%. Another product that the company produces are valves. The valves have remained steady around its planned gross margin of 35% with actual of 34.9%; these products are sold and shipped in huge bulk.

    Read More

  • Financial Analysis Of Cango Essay

    813 Words  | 4 Pages

    The profit margin percentage

    Read More

  • Analysis Of Metro Inc. And Loblaw Companies Limited

    552 Words  | 3 Pages

    Metro’s profit margin is also about double the percentage of Loblaws which demonstrates that Metro is better at taking revenue and turning it into profit than Loblaws. This company’s net earnings had a large increase of 12.9% from the previous year. The profit margin is important for shareholders because it shows them that the company is efficient and profitable. In addition, food deflation should ease in the next quarters so this will help grocery retailers, like Metro, to increase their profits and

    Read More

  • Home Depot Financial Analysis

    365 Words  | 2 Pages

    In conclusion, the margin of safety is the buffer between projected sales and the break-even

    Read More

  • Slickoil Pty Ltd. (2011)

    366 Words  | 2 Pages

    SlickOil Pty Ltd was founded in the 1980s in Blacktown, New South Wales, but has now grown to become part of a global company. During its founding years it used to create several oil and lubricant products that provide specialised manufacturing solutions for specific heavy industries. But with globalization Slick Oil successfully started dealing with its niche market because of its excellent customer service and after sales support. (Sheridan, 2016)

    Read More

  • Exxon: Business Level Strategy

    1123 Words  | 5 Pages

    As a major oil & gas company, ExxonMobil operates in three market segments: upstream, downstream and chemicals. ExxonMobil 's mission is to be the premier petroleum and petrochemical company in the world. To deliver on that mission requires each of the three market segments, upstream, downstream and chemical, to be premier among their competition. Overall Corporate Strategy With relentless attention to the operational excellence, safe, reliable, efficient operations and reducing the risk by applying the highest operational standards is embedded in ExxonMobil 's culture.

    Read More

  • Porter's Five Forces In The Oil And Gas Industry

    1601 Words  | 7 Pages

    In the Oil & Gas Industry the competition is significantly intensive, with the market being ruled by big giants such as Exxon Mobil, Total, ConocoPhillips, British Petroleum, Chevron and the Royal Dutch Shell etc. Appendix A shows the market values of these super majors. The market is over ruled by three different types of players. 1.

    Read More

  • Case Study Of Ajinomoto (Malaysia) Berhad

    1437 Words  | 6 Pages

    In addition, the net profit margin of the Ajinomoto Berhad is increasing. I recommend that the investor can invest in the Ajinomoto Berhad as the profit can be made through the investment in the Ajinomoto

    Read More

More about Chevron Essay

Open Document