Valero Energy Corp (VLO) shares climbed Wednesday following news that could reshape the company's crude supply chain. The Trump administration is easing Venezuelan oil sanctions, and shipments are about to start flowing again.
The Deal Takes Shape
A senior Trump administration official told Reuters that Venezuelan oil sales to the United States will begin immediately, with the initial shipment clocking in between 30 million and 50 million barrels. This isn't a one-time thing either—the flows will continue on an ongoing basis.
On Tuesday, President Donald Trump unveiled a plan to refine and sell up to 50 million barrels of Venezuelan crude that had been stuck under the U.S. blockade. According to the official, the U.S. will selectively ease sanctions to support the flow of Venezuelan crude and refined products into global markets. Here's the interesting part: much of the oil now headed to the U.S. would have been exported to China.
What the Charts Are Saying
Valero is currently showing strong bullish momentum, trading well above its key moving averages. The stock sits 9.6% above its 20-day SMA, 6.9% above its 50-day SMA, and 11.5% above its 100-day SMA—indicating a solid upward trend.
With an RSI of 62.94, the stock is in neutral territory, suggesting that while it has room to run, it's not yet in overbought conditions. This level indicates momentum is healthy, though traders should watch for any signs of a pullback as it approaches overbought territory.
The MACD is above its signal line, signaling bullish momentum and suggesting the current uptrend may continue. Traders should keep an eye on this indicator for any shifts that could suggest a weakening trend.
Key support is at $168.50, while resistance sits at $185.50. If the stock tests the support level, it could signal a potential reversal, while a breach of resistance may lead to further upside.
The golden cross in July, when the 50-day SMA crossed above the 200-day SMA, indicates a strong bullish trend. This crossover often signifies the beginning of a sustained upward movement, which aligns with the current price action.
Over the last 12 months, Valero has gained 48.44%, reflecting strong performance and investor confidence. This long-term trend reinforces the bullish outlook and suggests the stock has been in a solid uptrend. Currently, Valero is trading near its 52-week high of $185.62, showing strong demand and suggesting traders are optimistic about its future performance.
Price Action: Valero Energy shares were up 3.39% at $184.32 at the time of publication on Wednesday.