U.S. refiners are enjoying a relative advantage that could last longer than the “Golden Age” in the mid-2000s, according to BofA Securities.

The Energy Analyst: Doug Leggate named Valero Energy Corporation (NYSE:VLO) as the top pick among U.S. refiners, while maintaining a Buy rating and a price target of $135 for the stock. The analyst also issued the following ratings and price targets.

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The Energy Thesis: The U.S. refining industry seems to be on the cusp of a new “Golden Age” that is “characterized by a reset in sustainable ‘mid-cycle’ refining margins disproportionately advantaged vs international peers on multiple levels,” Leggate said in the note.

“Specifically we see U.S. refiners overlooked as net beneficiaries of a structurally higher natural gas costs ex US - a critical input to the margin necessary to clear higher international operating costs,” he added.

“On what we believe is a conservative outlook for a sustained natural gas differential based on the long dated forward strip prices and greater go-forward dependence from Europe on LNG to meet incremental demand,” the analyst wrote.