Refiner Valero Energy (VLO.N) reported better-than-expected first-quarter profits, benefiting from sustained demand as crude supplies remained tight due to disruptions in Russia and maintenance work at U.S. refineries.
Despite the disruptions, overall U.S. product supplied, a proxy for demand, averaged 20.10 million barrels per day (bpd) at the end of March, compared to 19.7 million bpd a year earlier, according to U.S. Energy Information Administration data.
Valero CEO Lane Riggs stated, “We are pleased to report strong financial results for the first quarter despite heavy planned maintenance across our refining system.”
The company’s quarterly margins stood at $3.53 billion, compared to $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 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.
The refiner also announced that its sustainable aviation fuel project, the DGD Port Arthur plant, is now expected to be operational in the fourth quarter, ahead of its earlier target of 2025.