UPDATE 2-Valero tops profit estimates in strong start to U.S. refiner earnings
(Adds details on results in paragraphs 4-9)
Oct 26 (Reuters) - Refiner Valero Energy beat analysts' estimates for third-quarter profit on Thursday, powered by sustained fuel and refined products demand against the backdrop of tight supplies.
Voluntarily production cut from top OPEC+ oil producers Saudi Arabia and Russia, low levels of U.S. crude stockpiles and increased exports have kept supplies tight.
"Our refineries operated well and achieved 95 percent throughput capacity utilization . . . Product demand remained strong in our U.S. wholesale system," CEO Lane Riggs said in a statement.
The second-largest U.S. refiner by capacity said throughput volumes averaged 3 million barrels per day (bpd) in the quarter, flat compared with a year earlier but higher than Street estimate of 2.96 million bpd, according to LSEG data.
The renewable diesel segment sales volumes averaged 3 million gallons per day, 761,000 gallons per day higher than a year earlier.
The Diamond Green Diesel Port Arthur plant, which started up in the fourth quarter of 2022, boosted the sales volumes, Valero said.
Margins for U.S. refiners remained under pressure during the quarter due to easing demand following the end of the peak summer driving season, a string of storms in the U.S. East Coast that kept drivers off the road, and the relatively high prices at the pump.
The 3-2-1 crack spread, a proxy for refining margins, fell around 35% during the July-September quarter.
Valero said quarterly refining margins fell 8.2% to $5.41 billion.
The San Antonio, Texas-based refiner reported an adjusted net income of $7.49 per share for the three months ended Sept. 30, compared with analysts' average estimate of $7.47. (Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
