West Coast independent refiner Tesoro (NYSE: TSO) posted another quarterly loss, putting it in the company of fellow independents Valero (NYSE: VLO) and Sunoco (NYSE: SUN). However, market dynamics did improve from the end of 2009, which may give shareholders a glimmer of hope.

For the first quarter, Tesoro's net loss amounted to $155 million, or $1.11 per share. Excluding after-tax items -- an asset impairment charge and a hit related to health-care reform -- the situation improves only modestly, to a loss of $0.97 per share.

Such performance just plain stinks versus the year-ago quarter, when Tesoro earned $0.37 per share. Encouragingly, both the GAAP and adjusted losses improved from Q4 2009.

At the heart of the sequential increase was a wider gross refining margin. That metric averaged $5.37 per barrel in 2009's fourth quarter, but advanced to $6.36 in the just-completed period.

Elsewhere in the industry, integrated giants ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), and Total (NYSE: TOT) all reported more favorable market conditions in their downstream segments. Notably, Total's European refining margin more than doubled from Q4 2009, which just goes to show that U.S. independent refiners aren't always the stars of a cyclical rebound.

Hunting for some more positive news, Tesoro management reported that gasoline demand and related margins did improve during the quarter. Also, for the year, the company plans to deliver $160 million to $170 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) from its non-capital efficiency program. That should nicely complement the annual EBITDA savings -- possibly as much as $30 million -- from the $60 million management expects to spend on quick-execution, high-return capital projects in 2010.

Going forward, the one company-specific unknown regards an April 2 fire at Tesoro's Washington state refinery, which resulted in seven fatalities. Unfortunately, that places Tesoro alongside deepwater driller Transocean, which more recently suffered both accident and human loss. Currently, processing units at the refinery are shut down, and as recently as April 10, Tesoro said that refinery throughput reductions were not expected to have a "material impact" on financial results. Whether there'll be litigation and other related costs, we'll have to wait and see.

Zooming out to the big-picture, long-term view of things, management noted, "we believe the structure of the West Coast market has not changed ...." In other words, the company should eventually feel the benefit of its West Coast advantage.

Just how significant that benefit will be, well, that's another matter, and certainly the biggest unknown of all.

Total is a Motley Fool Income Investor selection. Try any of our Foolish newsletters free for 30 days.

Fool contributor Mike Pienciak holds no financial interest in any company mentioned in this article. The Fool has a disclosure policy.