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Brazil, Mexico fuel demand tightening market - Valero executive

Bnamericas Published: Tuesday, April 26, 2011
Increasing fuel demand in Brazil and Mexico will drive exports from US Gulf coast refineries, according to Joe Gorder, CCO at Texas-based refiner and marketer Valero Energy (NYSE: VLO). "Mexico demand [is] exceeding their supply and it's continuing to import products. They are up to 350,000b/d of gasoline and 110,000b/d of diesel," Gorder said during the company's first quarter results presentation. "[Brazil's] Petrobras [NYSE: PBR] has reported record domestic gasoline consumption, around 400,00b/d in 2010, and everybody believes they are going to need imports to satisfy their demand." Lower crude runs at Venezuelan and Caribbean refineries also are tightening the market, along with the absence of Libyan grades that are affecting overall distillate production in Europe as well as Chinese demand, he added. "I do believe that we are just seeing a long-term trend here," said the executive. ARUBA When asked about performance at Valero's 235,000b/d refinery in Aruba, investor relations VP Ashley Smith said the quarter was not profitable and that throughput stood at 140,000b/d. In December, the refiner announced completion of a US$90mn-plus overhaul at the Caribbean plant. Chief executive Bill Klesse added it was a difficult startup and the company had some "issues" in 1Q11, going in the second quarter. Klesse said in January, "the [Aruba] refinery needs investment; it still needs investment in certain types of conversion units."

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