Refiner Valero Beats Profit Estimates on Resilient Demand, Tight Supplies

Reuters, April 29, 2024

Refiner Valero Energy (VLO.N), beat first-quarter profit estimates on Thursday, benefiting from sustained demand as supplies remained tight due to disruptions in Russia and maintenance work at U.S. refineries.

Fuel supplies came under pressure as Ukrainian drone attacks shut several Russian refineries, while U.S. refiners routinely scheduled maintenance in the first quarter to prepare equipment for high demand in the summer driving season.

Despite the disruptions, overall U.S. product supplied, a proxy for demand, averaged at 20.10 million barrels per day (bpd) at the end of March, compared with 19.7 million bpd a year earlier, according to U.S. Energy Information Administration data.

"We are pleased to report strong financial results for the first quarter despite heavy planned maintenance across our refining system," Valero CEO Lane Riggs said.

The company said it plans to run its refineries at up to 95% of their total combined throughput capacity of 3.2 million barrels per day in the second quarter.

Its seven U.S. Gulf coast refineries are set to operate at 99% of combined 1.9 million bpd throughput capacity, the company said on Thursday.

Shares of the company were little changed, trading around $167 on Thursday afternoon. The stock is up 28% year-to-date.

Valero, which kicked off earnings for refiners, said its quarterly margins stood at $3.53 billion, compared with $5.9 billion a year earlier.

Its refining throughput volumes averaged 2.8 million bpd, down from 2.9 million bpd.

Margins and profits of U.S. refiners have normalized after hitting sky-high levels in 2022, when Russia's invasion of Ukraine had disrupted crude supplies. Weaker economic activity and an increase in global refining capacity have further stabilized their earnings.

"Valero posted stronger results in all three operating segments, although lower costs and higher volumes in refining and better volumes and margins in renewable diesel made the most difference," said Matthew Blair, managing director at TPH&Co.

The refiner reported an adjusted net income of $3.82 per share in the quarter, above analysts' average estimate of $3.24 per share, according to LSEG data.

Valero also said its sustainable aviation fuel project, DGD Port Arthur plant, is now expected to be operational in the fourth quarter, ahead of its earlier target of 2025.

(Reporting by Arunima Kumar; Editing by Shinjini Ganguli and Jonathan Oatis)

Click here to read the full article from Reuters.

Copyright 2024 Thomson Reuters. Click for restrictions.

Comments and Discussion

There are no comments yet.

Add a Comment

Please log in or register to participate in comments and discussions.

Inspectioneering Journal

Explore over 20 years of articles written by our team of subject matter experts.

Company Directory

Find relevant products, services, and technologies.

Training Solutions

Improve your skills in key mechanical integrity subjects.

Case Studies

Learn from the experience of others in the industry.


Inspectioneering's index of mechanical integrity topics – built by you.

Industry News

Stay up-to-date with the latest inspection and asset integrity management news.


Read short articles and insights authored by industry experts.

Expert Interviews

Inspectioneering's archive of interviews with industry subject matter experts.

Event Calendar

Find upcoming conferences, training sessions, online events, and more.


Downloadable eBooks, Asset Intelligence Reports, checklists, white papers, and more.

Videos & Webinars

Watch educational and informative videos directly related to your profession.


Commonly used asset integrity management and inspection acronyms.