Bill Klesse

Valero Posts Loss After Write-Downs

Valero Energy Corp.

(VLO) swung to a first-quarter loss as higher oil prices and the cost of closing an unprofitable refinery offset growing global revenue.Valero, the largest independent oil refiner in the U.S., and its competitors are seeing domestic sales drop because of a relatively high U.S. unemployment rate and higher fuel-efficient vehicle production. Major shifts in fuel demand and in energy production have wiped out the profitability of such former refining hubs as the U.S. East Coast and the Caribbean.Valero had warned in April its first-quarter earnings would be in the red because of its decision to temporarily shut down its 235,000 barrel-a-day Aruba refinery in the Caribbean, which supplied gasoline to the U.S. mainland. But its revenue grew, thanks partly to the proceeds of sales of diesel into Europe and gasoline into Latin America, where demand has outpaced local refining capacity.Valero exported 170,000 barrels a day of diesel in the first quarter, the bulk of it to E...

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