(Reuters) -Refiner HF Sinclair on Wednesday surpassed first-quarter profit estimates aided by higher fuel sales and announced a new share buyback program of $1 billion.
Global fuel supplies have tightened this year following outages at Russian refineries after Ukrainian drone attacks shut a significant section of Russia's refining capacity during the quarter.
U.S. product supplied, a proxy for demand, averaged at 20.10 million barrels per day (bpd) at the end of March, compared with 19.7 million bpd a year earlier, according to U.S. Energy Information Administration data.
HF Sinclair's sales volumes of refined products rose 22.4% to 631,470 bpd, while renewable fuel sales also increased.
The company's refinery utilization rose to 89.2% from 73.5% a year ago. Its throughput averaged 643,300 bpd, a 15% rise over the year earlier, as it saw lower turnaround activities at its refineries.
"As we head into summer driving season, we expect a favorable market environment and believe we are well positioned to generate strong earnings and cash flows," CEO Tim Go said.
HF Sinclair's refinery gross margin, however, declined 45% to $12.70 per produced barrel in the first quarter, it said, as fuel prices scaled back.
Larger rivals Marathon Petroleum (NYSE:MPC) and Valero Energy (NYSE:VLO) have also beaten their quarterly profit estimates despite a slump in margins.
Dallas, Texas-based HF Sinclair posted adjusted net income of 71 cents per share for the three months ended March 31, compared with average analysts' estimate of 65 cents per share, according to LSEG data.