(Reuters) -U.S. refiner Valero Energy Corp’s quarterly earnings blew past Wall Street expectations on Tuesday, as margins strengthened thanks to higher demand for fuel and refined products.
The company’s shares, which have gained nearly 34% so far this year, rose as much as 3.2% in premarket trading.
Global fuel demand rebounded to near pre-pandemic levels, while overall crude oil supplies tightened due to the Russia-Ukraine war, more than doubling Valero’s quarterly refining margin to $3.21 billion from a year earlier.
Refiners have also benefited from a surge in natural gas prices in Europe, which has reduced distillate inventories worldwide.
Valero, the first major U.S. refiner to post quarterly results, said its total refinery throughput volumes averaged 2.8 million barrels per day in the quarter ended March 31, 390,000 barrels per day higher than a year earlier.
“The fundamentals that drove strong results in the first quarter, particularly in March, continue to provide a positive backdrop for refining margins,” Chief Executive Officer Joe Gorder said in a statement.
The company’s refining segment posted an adjusted operating income of $1.47 billion, compared with an adjusted loss of $506 million in the year-ago period.
Valero reported a quarterly adjusted profit of $2.31 per share, far ahead of analysts’ average estimate of $1.66, according to Refinitiv IBES data.
Rivals Phillips 66, Marathon Petroleum Corp are also expected to post a quarterly profit compared to year-ago losses.
(Reporting by Rithika Krishna in Bengaluru; Editing by Shailesh Kuber)
