US refiner Valero Energy Corporation has announced an increase in quarterly dividends as the company outperforms analysts' expectations.
Valero announced an 11.1% increase in its quarterly dividend, up to 25 cents from 22.5 cents per common share, or an annual dividend of $1.00 per share for 2014-up from 90 cents per share for 2013.
Valero is expected to release fourth quarter 2013 results on 29 January.
Related article: They Say This Is The Next Nation For Shale
Valero Energy Corp. is benefiting from higher volumes and wider discounts for sour crude oil and is predicting that fourth-quarter earnings will be in the range of $1.60 to $1.80 per share, excluding a nontaxable gain of $325 million for the sale of an interest in CST Brands Inc.
Valerio is also predicting a significant rise in its ethanol business from the year before, citing higher gross margins on production volumes.
Shares of Valero closed down 94 cents at $50.95 on Wednesday. In extended trading after the fourth-quarter outlook, they were up $2.05, or 4 percent, to $53.
The largest independent refinery in the world, Valero is lobbying Washington to scrap the ethanol mandate urgently because refiners can't keep up with the costs of maintaining the stringent biofuels targets.
Related article: This Is A New Target For These Oil Heavyweights
In a letter in September to the Environmental Protection Agency (EPA), Valero CEO Bill Klesse called for an immediate waiver, noting that the EPA has the "flexibility to waiver volumes which will lower the price of RINS [renewable identification numbers], will lower the cost to the consumer and make the marketplace fair".
Valero is also the lone significant voice speaking out against US crude oil exports-an issue that will emerge as one of the most critical energy questions of this year.
Valero is fearful that its profits would take a hit because lifting the crude export ban would potentially raise oil prices at home and in turn push prices up at the gas pump, leading to refinery closures that have only just recouped from earlier high oil import prices.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More