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Refiner Valero posts smaller loss than feared as demand rebounds

August 03/2020

MOSCOW (MRC) -- Independent US refiner Valero Energy Corp reported a smaller-than-expected quarterly loss on Thursday, adding that it saw a rapid recovery in demand for its products as the quarter progressed, reported Reuters.

The results, which kicked off US refining earnings, failed to lift investor sentiment as shares of the company and other refiners fell 3% to 7%, dragged down by oil prices that plummeted on concerns fuel demand recovery could be capped by a resurgence in coronavirus infections.

Global fuel consumption in the second quarter recovered from record lows in March and April, as countries started emerging from lockdowns.

While the impact of the pandemic and the ensuing global economic downturn so far this year has been significant, we saw a rapid recovery in demand for refined products as we moved through the quarter, Valeros Chief Executive Officer Joe Gorder said.

Valero forecast current-quarter throughput, or the volume of crude processed by its refineries, to be about 2.43 million barrels per day (bpd), down more than 18% from a year earlier.

Throughput for the second quarter dropped 22% to 2.3 million bpd, while refining margins fell 58% to USD1.08 billion.

Credit Suisse analyst Manav Gupta said the results were better-tha-feared, helped by Valeros renewable diesel and ethanol segments. He added refining equities would move higher or lower, depending upon whether Texas, Florida and Arizona can successfully avoid another virus-led shutdown.

On an adjusted basis, Valero lost USD1.25 per share in the reported quarter, compared to analysts estimates of a loss of USD1.41 per share loss, according to Refinitiv IBES.

The San Antonio, Texas-based company also recorded a gain of USD1.8 billion in the quarter related to inventory valuation.

As MRC reported earlier, in June 2020, Valero Energy Corps Memphis, Tennessee, crude oil refinery was operating at two-thirds of its 180,000 barrel-per-day (bpd) capacity because of low demand in the COVID-19 pandemic. The Memphis refinery cut production by as much as 50% in early April and has been raising production gradually since then.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, Valero, Russia, USA.
Category:General News
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