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Valero posts larger Q1 loss due to polar storm

April 23/2021

MOSCOW (MRC) -- US refiner Valero Energy Corp posted a larger quarterly loss as a winter storm hit its operations in February, but its top boss shrugged off the rare event to focus on rising fuel demand and fatter refining margins, reported Reuters.

A cold snap in Texas earlier this year disrupted energy supply and sent numerous refineries offline, prompting profit warnings from companies including Exxon Mobil and Phillips 66. But the storm-related disruptions also boosted fuel prices and in turn, margins for refiners, with Valero's Q1 refining margin surging 33% sequentially to USD1.45 billion.

The sector also benefited from rising fuel consumption as an easing of restrictions and the mass rollout of vaccines prompted more people to travel.

"We are encouraged by the substantial increase in products demand and refining margins in the last three months," Chief Executive Officer Joe Gorder said in a statement.

However, rising coronavirus cases in some countries are threatening the fuel demand recovery.

Valero, the first US refiner to post quarterly results, said refining throughput, or the amount of crude it processed, fell nearly 8% sequentially to 2.4 million barrels per day.

Net loss attributable to its stockholders was USD704 million, or USD1.73 per share, for the three months ended March 31, compared with a loss of USD359 million, or 88 cents per share, in the prior quarter. Its results included costs of about USD579 million due to the impacts from Winter Storm Uri.

As MRC wrote before, Valero Energy Corp restarted the large crude distillation unit (CDU) at its 335,000-bpd Port Arthur, Texas, refinery the first week of September, 2020. The 268,000-bpd CDU was shut with all other units at the refinery on Aug. 25 because of the threat from Hurricane Laura.

We remind that 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 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 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.


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