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VOL. 126 | NO. 18 | Thursday, January 27, 2011

Valero Narrows 4Q Loss to $438M as Demand Improves

CHRIS KAHN | AP Energy Writer

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NEW YORK (AP)Valero Energy Corp. said Wednesday its fourth-quarter loss narrowed as demand for fuel and other refined petroleum products picked up.

Valero, America's largest independent oil refiner, reported a loss of $438 million, or 77 cents per share, for the final three months of the year. That compares with a loss of $1.4 billion, or $2.51 per share, in the year-ago period. Revenue increased 24 percent to $22 billion.

The company took a loss of $610 million on the sale of a New Jersey refinery. Excluding that, Valero earned $180 million, or 32 cents per share in the quarter. That matched a FactSet survey of analysts, who typically exclude special items in their estimates.

Valero's struggled in 2009 as petroleum consumption tumbled. When oil prices rose that year, demand was so low that the company's refineries couldn't pass the higher costs on to customers.

Refining margins improved in 2010 as the global economy gained steam, the company said. Valero's fourth-quarter margins improved 49 percent to $7.30 per barrel due to higher prices for diesel and gasoline. The company also ran a more efficient operation, increasing production 10 percent while cutting operating expenses nearly 7 percent in the quarter.

"What a difference a year makes," Chairman and CEO Bill Klesse said in a statement. "The global economic recovery is underway with very strong growth in developing countries contributing to a surge in global demand for oil and refined products."

For the full year, Valero earned $324 million, or 57 cents per share, compared with a loss of $2 billion, or $3.67 per share, in 2009.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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