Valero Energy Corp. (VLO) swung to a first-quarter profit as the refiner continued to benefit from increased use of cheap, domestically produced oil.
Valero and other refiners have been able to take advantage of the growing amounts of crude oil being produced in the U.S. and Canada at prices much lower than imported oil. Valero's intake of light, sweet crude, most of it produced in the U.S., surpassed one million barrels a day in the first quarter, up 25% from the year before and an all time high.
That access to discounted oil, plus strong diesel and jet fuel sales, helped drive operating income at its Midwest refineries to $12.49 a barrel, almost double what it was a year ago. Operating margins swung to a positive 3.2% from negative 0.7% the year before, helping to offset flat fuel sales volumes.
Valero Energy reported a profit of $654 million, or $1.18 a share, compared with a loss of $432 million, or 78 cents a share, a year earlier. The year-earlier quarter included a $1.09-a-share asset-impairment charge. Revenue dropped 4.8% to $33.47 billion.