- Retail regular gasoline prices fell by 2.4c in the last four weeks to $3.822/Gal. About 50% of the change was due to the price of crude oil, while the remainder was the refinery margin
- Scroll down for a chart of the RBOB-WTI crack spread, a measure of refinery margin. It shows elevated cracks this year
- Total motor gasoline inventories fell by 2.7 MMBbl for the week ending September 1 and are about 5% below the five-year average for this time of year
- Diesel surges to highest since January on tight supplies and persistent demand
- Since hitting a low in May, NY Harbor ULSD futures have risen by over $1/gal, marking a 40% increase to $3.30/gal, its highest since January
- The surge could be driven by the global market tightening from the loss of Russian diesel exports and reduced sour-crude output from OPEC+ countries
- Furthermore, distillate inventories may stay low as refiners enter fall maintenance while demand rises for farming, trucking, and heating
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- Retail diesel prices rose by 24.5c in the last four weeks to $4.540/Gal. About 47% of the change was due to the price of crude oil, while the remainder was the refinery margin
- Scroll down for a chart of the NY Harbor ULSD-WTI crack spread, a measure of refinery margin. It shows elevated cracks this year
- Distillate fuel inventories rose by 0.7 MMBbl for the week ending September 1 and are about 14% below the five-year average for this time of year
- Refinery roadblocks expected to surge from 2025 (Bloomberg)
- Amrita Sen of Energy Aspects warns that "the refining system could hit a bottleneck post-2025 as start-ups stay limited and Russia and Saudi output cuts limit supplies" in a discussion with Jefferies
- Sen notes a "structural" as new capacity is optimized for running sours, but embargoes and OPEC+ output cuts hinder shipments, affecting runs, yields, and margins
- She added that despite an expected margin drop next year, tight fundamentals will prevail; however, petrochemical margins will be affected by Chinese overcapacity
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