MOSCOW (MRC) -- San Antonio-based Valero Energy Corp, the second-largest US oil refiner, posted quarterly earnings well above expectations, as margins nearly tripled on the back of soaring demand for fuel thanks to a vaccine-induced economic recovery, reported Reuters.
Gasoline and distillate consumption in the United States improved drastically in the last quarter of 2021, compared with the year-ago period, as more people commuted to offices and took to holiday travel on easing coronavirus curbs.
A jet fuel recovery and low product inventories from years of refinery shutdowns combined to nearly triple Valero's fourth-quarter refining margins to USD3 billion from a year earlier, Valero Chief Executive Office Joe Gorder said on a post-earnings call.
The refining segment's adjusted operating income was USD1.1 billion, compared with a loss of USD476 million in the year-ago period, portending bright scenarios for peers Marathon Petroleum and Phillips 66 that are yet to report results.
Gasoline demand has returned to 2019 levels, Valero executives said, adding that the company is "very bullish" on the fuel.
Jet fuel demand, however, "will be the unknown", senior executive Gary Simmons said. The company expects domestic air travel to pick back up "fairly rapidly" but international travel may take longer.
San Antonio, Texas-based Valero's total refinery throughput volumes averaged 3 million barrels per day in the quarter, 483,000 bpd higher than a year earlier. It forecast current-quarter throughput slightly below that level.
Valero reported an adjusted profit of USD2.47 per share for the three months ended Dec. 31, higher than analysts' average estimate of USD1.84, according to Refinitiv IBES data.
As MRC informed earlier, Valero Energy ran its 14 refineries at between 88% and 92% of their combined capacity of 3.2 million barrels per day (bpd) in the fourth quarter of 2021.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.