Tighter supply and heavy industry-wide turnaround activity to boost margins
- Valero expects first-quarter U.S. refining margins to be supported by tighter supply
- Heavy industry-wide turnaround activity in the first quarter will constrain product inventories
- Demand for diesel on Valero’s system is running about 7% higher than last year
- Gasoline exports to Mexico and Latin America remained steady
- Valero is optimistic about gasoline cracks improving with the driving season
Valero Energy expects first-quarter U.S. refining margins to be supported by tighter supply caused by a number of turnaround projects ahead of the high-demand summer driving season. The heavy industry-wide turnaround activity in the first quarter will constrain product inventories, providing support to refining margins. Demand for diesel on Valero’s system is running about 7% higher than last year, driven by low inventories and stronger heating demand in the U.S. and Europe. Gasoline exports to Mexico and Latin America remained steady, while Europe’s gasoline markets remain relatively strong. Valero is optimistic about gasoline cracks improving with the driving season, as gasoline demand improves and the colder weather hits Europe.
Public Companies: Valero Energy (VLO)
Private Companies:
Key People: Lane Riggs (Executive), Gary Simmons (Chief Operating Officer)
Factuality Level: 8
Justification: The article provides specific information about Valero Energy’s expectations for first-quarter U.S. refining margins and the factors that will support them, such as tighter supply and heavy industry-wide turnaround activity. The statements made by Valero executives are supported by specific reasons and data, such as strong domestic demand, decent export volumes, and low inventories. The article also includes information about changes in trade flow and the impact on Valero’s diesel exports. Overall, the article provides factual information and includes specific details to support the statements made.
Noise Level: 7
Justification: The article provides some relevant information about Valero Energy’s expectations for first-quarter refining margins and the factors that may impact them. However, it contains a lot of specific details and quotes from company executives that may not be of interest to the general reader. The article also includes information about gasoline and diesel demand and exports, which is somewhat related but not directly relevant to the main topic of refining margins. Overall, the article could have been more focused and concise.
Financial Relevance: Yes
Financial Markets Impacted: The article provides information on the expected first-quarter U.S. refining margins and the factors that will support them, such as tighter supply caused by turnaround projects and strong domestic demand. This information is relevant to investors and companies in the energy and refining sectors.
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article does not describe any extreme events. It focuses on the expected refining margins and factors affecting gasoline and diesel demand.
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