By BEN LEFEBVRE
HOUSTON -- Valero Energy said it expects more
refining capacity to come offline
because of weakening fuel demand, even after a number of refinery closures in the US and
Europe in the past year.
High unemployment and higher vehicle fuel
efficiency have tamped down on fuel sales on both sides of the
High oil prices and decreasing fuel demand
caused a number of US refineries in the northeast to shut down,
while Valero shut its refinery in Aruba and Hovensa, a
joint venture between Hess Corp. and Petroleos de Venezuela
S.A.(PDVSA), shut its refinery in the Virgin Islands.
"We believe there's still too much refining capacity in the US and
western Europe," Valero CEO Bill Klesse said during a
conference call with investors. "Some things die hard."
Valero said US gasoline sales in April were
"about even" from the month before. Gasoline sales on a
same-store basis were down 0.7%, a company executive said
during a conference call with investors.
Instead, sales growth was coming from
Valero exported 170,000 bpd of diesel exports
in the first quarter, the bulk of it to Europe. First-quarter
gasoline exports were 80,000 bpd, most of which went to Mexico,
the company said.
Valero also said it could double the amount of
domestically produced light, sweet crude oil its refineries
run, to 400,000 bbl, a day with minor costs to its
Valero owns a handful of refineries with
access to the Eagle Ford shale, an increasingly productive
source of light, sweet crude in south Texas.
Crude oil from Eagle Ford is currently selling
at $6/bbl below that for Gulf Coast benchmark crude Light
Valero said its newly acquired refineries in
Meruax, La., and Pembroke, Wales, were showing signs of turning
a profit after being unprofitable during the first quarter.
Dow Jones Newswires