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Refiner posts smaller-than-expected loss, pins recovery hopes on vaccine rollout

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US refiner Valero Energy Corp posted a much smaller quarterly loss than Wall Street expected and pinned hopes on widespread COVID-19 vaccinations to ease travel restrictions and improve demand for fuel.

Crude prices have continued to climb after rallying more than 20 percent in the last quarter, driven by optimism over the development of coronavirus vaccines, even as refiners struggled with uneven demand due to renewed lockdown measures.

“We expect to see continued improvement in product demand with widespread vaccine distribution around the world,” chief executive officer Joe Gorder said, adding that the company expects a faster recovery in margins from the shuttering of smaller, uncompetitive refineries.

Valero, the first US refiner to post fourth-quarter results, said refining throughput, or the amount of crude it processed, rose about 1 percent to 2.6 million barrels per day from the third quarter.

Refining margin for the fourth quarter rose 14.2 percent to $1.09 billion from the third, although it was 64.1 percent lower than from a year earlier.

Adjusted net loss attributable to Valero stockholders narrowed to $429 million, or $1.06 per share, in the three months ended December 31, from $472 million, or $1.16 per share, in the third quarter.

Wall Street analysts expected a loss of $1.42 per share, according to Refinitiv IBES.

The San Antonio, Texas-based company said quarterly revenue climbed 5 percent to $16.60 billion from the previous quarter, above analysts’ average estimate of $16.21 billion.

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