Valero officials on Tuesday said they expect refinery run cuts in the third and fourth quarters of this year amid a product supply glut. Company Senior Vice President Gary Simmons said during Valero’s second quarter conference call refinery utilization would have to rebalance in the wake of higher production in the winter, when refineries had an incentive to produce the summer grade of gasoline.
For the quarter, Valero’s profits fell 42% year-over-year amid tightening refining margins and higher costs to comply with the Renewable Fuel Standard. Despite the fall in profits, Valero’s earnings still beat analysts’ estimates.
“In the second quarter, we continue to face a challenging margin environment, which was further complicated by high compliance cost headwinds, but our team performed well, running safely and reliably while maintaining our cost efficient operations,” said Valero CEO Joe Gorder.
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