MOSCOW (MRC) -- Independent US refiner Valero Energy Corp topped Wall Street estimates for quarterly profit, as it earned more from refining low-cost Canadian heavy crude, reported Reuters.
Refining margins in the company’s biggest segment, US Gulf Coast operations, rose 16% to USD1.64 billion.
"Our refineries operated well at 96% utilization, allowing us to take advantage of wider sour crude oil differentials and weakness in high sulfur residual feedstocks in the fourth quarter," Chairman and Chief Executive Officer Joe Gorder said.
Most of the US Gulf Coast refiners, including Valero, can process heavy crude to make marine fuels compliant with the International Maritime Organization’s (IMO) new regulations. Refiners spent heavily in 2019 to refurbish distillation units and cokers to process cheaper, heavy grade crude.
Analysts have highlighted Valero to be a major beneficiary of IMO’s low-sulfur fuel oil mandate.
Excluding items, the company reported a profit of USD2.13 per share beating analysts’ average estimate of USD1.62, according to IBES data from Refinitiv.
Net income attributable to the shareholders rose to USD1.1 billion, or USD2.58 per share, in the fourth quarter ended Dec. 31, from USD952 million, or $2.24 per share, a year earlier.
The San Antonio, Texas-based company’s total revenue, however, fell 3% to USD27.88 billion.
Rival Marathon Petroleum (MPC.N) posted higher adjusted earnings on Wednesday, well-above Wall Street expectations on better-than-expected refining margins setting a positive tone for the entire sector.
As MRC informed earlier, Valero Energy Corp restarted the small CDU at its Port Arthur refinery after repairing a valve on 25 September 2019.
And in late October 2019, Valero Energy Corp shut the small crude distillation unit (CDU) at its Port Arthur refinery. The 75,000-bpd AVU 147 CDU was shut to repair a heat exchanger.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC