UPDATE 4-Valero profit boosted by cheaper domestic oil

Tue Jan 29, 2013 2:30pm EST
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* Earnings of $1.88 per share beat Wall Street view of $1.18

* No longer importing foreign light, sweet crude

* 2013 Capex seen at $2.5 billion

* Shares hit highest level in more than four years (Adds analyst comment, financial and industry details, updates share price)

By Anna Driver

Jan 29 (Reuters) - Valero Energy Corp posted a surprisingly strong quarterly profit on Tuesday, as the largest independent U.S. refiner drastically cut its dependence on foreign crude in favor of cheaper domestic supplies.

The results, which sent shares up more than 11 percent, are the latest sign of how the boom in U.S. shale oil production is redefining the entire oil sector, from the wellhead to the gas pump.

In November, the International Energy Agency forecast that U.S. oil output, aided by surging volumes from shale and other onshore rock formations, could top production from Saudi Arabia and Russia by 2017.

To take advantage of the boom, refining companies are investing heavily in railcars, barges and other means to bring less expensive oil from Texas and North Dakota to their refineries in many parts of the country.   Continued...