Refiners Valero, PBF cruise past profit estimates on strong margins

U.S. refiners Valero Energy Corp (VLO.N) and PBF Energy Inc (PBF.N) on Thursday posted bumper second-quarter profits that handily beat Wall Street estimates, lifted by higher demand for fuel and refined products.

Tighter crude oil supplies due to sanctions on major supplier Russia following its invasion of Ukraine, at a time when global fuel demand is soaring past pre-pandemic levels, have boosted margins for gasoline and diesel.

Valero, the first major U.S. refiner to post quarterly results, said refining margin in the quarter rose to $8.09 billion from $2.05 billion a year earlier.

PBF Energy said its gross refining margin rose more than five times to $30.41 per barrel of throughput in the quarter.

Profit margins hit record highs in the reported quarter for makers of gasoline and distillates such as diesel, jet fuel and heating oil.

Gulf Coast gasoline margins skyrocketed to $40 a barrel from the 2017-2019 average of $11, with per-barrel diesel margins jumping to $55 from $13, according to energy consultancy Tudor Pickering Holt.

PBF shares rose 5.6% to $33 in premarket trading, after the company also said it will buy shares it does not already own of PBF Logistics LP (PBFX.N) in a deal valued at about $575 million.

Valero’s shares rose 2.7% to $114.54.

The company posted net income attributable to its stockholders of $4.7 billion, or $11.57 per share, for the three months ended June, compared with $162 million, or 39 cents per share, a year earlier.

On an adjusted basis, Valero earned $11.36 per share, compared with estimates of $9.58, according to Refinitiv IBES data. PBF Energy’s adjusted profit of $10.58 per share also beat analysts’ expectations of $7.47.