Rebound in oil demand boosts results for refiners Valero, PBF

The Valero Refinery next to the Houston Ship Channel is seen in Houston, Texas, United States on May 5, 2019. REUTERS / Loren Elliott / File Photo

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July 29 (Reuters) – U.S. refiners Valero Energy Corp (VLO.N) and PBF Energy Inc (PBF.N) released results that exceeded analysts’ expectations as they benefited from a rebound in demand for fuel due to an easing of COVID-19-related travel restrictions.

After hitting record highs in 2020, fuel consumption has increased this year as expanding vaccination campaigns encourage governments to lift restrictions linked to the virus.

Valero’s second-quarter refining margin increased nearly 36% to $ 1.97 billion, with managing director Joe Gorder saying the margin environment for refining was “weak, but otherwise improving “.

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PBF’s gross refining margin, meanwhile, was $ 711.3 million, up from $ 650.2 million in the first quarter.

Valero shares jumped 2.5% pre-market, while PBF gained 3.5%.

PBF CEO Tom Nimbley said demand for fuel was gradually improving, but still not at pre-pandemic levels.

“We expect that as demand gradually improves, we may see additional supply of crude enter the market, which could shift current headwinds to tailwinds in the commodities market.” , Nimbley said.

Valero and PBF, which launched the U.S. Refiner Profit Reports, also saw 15-20% improvements in their refining throughput – the amount of crude processed by these companies.

Valero’s adjusted earnings of 48 cents per share topped analysts’ estimates by 14 cents, while PBF’s adjusted loss of $ 1.26 was lower than expected loss of $ 1.46, according to Refinitiv IBES estimates .

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Report by Shariq Khan in Bangalore; edited by Uttaresh.V

Our standards: Thomson Reuters Trust Principles.

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Felix J. Dixon