halbergman/E+ via Getty Images
Valero Energy (NYSE:VLO) closed +3.3% on Thursday after saying it expects Q1 U.S. refining margins will be supported by tighter supply caused by several turnaround projects ahead of the summer driving season, according to Dow Jones.
Valero (VLO) executives also said on the post-earnings conference call they were optimistic about near-term gasoline and diesel margins due to strong domestic demand and decent export volumes.
“In the near term, product inventories ahead of the summer driving season are expected to be constrained with heavy industry-wide turnaround activity in the first quarter, providing support to refining margins,” President and CEO Lane Riggs said on the call.
Valero (VLO) said its 14 refineries are scheduled to operate at 83%-86% of combined total throughput capacity in Q1, after hitting 94% in Q4 2023.
The company’s wholesale gasoline volumes so far in Q1 are “down a few percent” from last year due as the recent cold weather blast has suppressed demand, but healthy exports have left “us pretty optimistic on gasoline cracks once we move into spring when gasoline demand improves with the driving season,” COO Gary Simmons said on the call.
Demand for diesel on Valero’s (VLO) system so far this quarter is running ~7% higher than a year ago, due in part to low inventories and stronger heating demand in the U.S. and Europe, Simmons also said.
