Valero Energy Corp's quarterly earnings blew past Wall Street expectations on Tuesday, as margins strengthened thanks to rising demand for fuel and as worldwide supply tightened following Russia's invasion of Ukraine, reported Reuters.
Valero's quarterly refining margin more than doubled to USD3.21-B from a year earlier. Global fuel demand has rebounded to near pre-pandemic levels, while supply of refined products like diesel and jet fuel have tightened sharply due to the Russia-Ukraine war.
In addition, numerous refineries worldwide have closed, to the benefit of facilities that are still operating.
Valero, the first major US refiner to post quarterly results, said its total refinery throughput volumes averaged 2.8 MMbpd in the quarter ended March 31, 390,000 bpd higher than a year earlier.
The company's refining segment posted adjusted operating income of USD1.47-B, compared with an adjusted loss of $506 million in the year-ago period. Its per-barrel refining margin was USD12.74 in the first quarter, compared with $6.91 for the year-ago period.
Valero reported a quarterly adjusted profit of USD2.31 per share, far ahead of analysts' average estimate of USD1.66, according to Refinitiv IBES data.
The company's shares, which have gained nearly 34% so far this year, rose as much as 3.2% in premarket trading.
As MRC wrote previously, San Antonio-based Valero Energy Corp, the second-largest US oil refiner, 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 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas, shipments of PP random copolymers decreased significantly.
MRC