Retail regular gasoline prices rose by 19.6c in the last four weeks to $3.912/Gal. About 57% 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 4.7 MMBbl/d for the week ending September 30, and are about 9% below the five-year average for this time of year
Retail diesel prices rose by 21.3c in the last four weeks to $5.224/Gal. About 45% of the change was due to the price of crude oil, while the remainder was 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 fell by 3.4 MMBbl/d for the week ending September 30, and are about 21% below the five-year average for this time of year
Diesel prices are surging in the U.S. and Europe ahead of a winter that is expected to see significant supply disruption (BBG, Reuters)
Earlier this week, the benchmark diesel price in Europe soared to nearly $180/Bbl, while the NY Harbor diesel price was almost at $170/Bbl
Fuel supply is also being affected by refineries undergoing seasonal maintenance and unplanned outages
Additionally, stockpiles in both the U.S. and Europe are dangerously low ahead of winter
High gas prices might prompt a switch from gas to oil in power generation and refinery operations this winter in Europe
The IEA, in its September monthly report, said it expects widespread switching from gas to oil for heating purposes, saying it will average 0.700 MMBbl/d from October 2022 to March 2023 - double from 2021’s levels
The already tight global markets for refined products will become even more constrained as a result of increased imports due to rising European fuel demand
Furthermore, the expected tightening of the diesel market in Europe might coincide with the EU ban on Russian refined petroleum products imports starting in February 2023
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