Retail regular gasoline prices rose by 31.8c in the last four weeks to $3.415/Gal. About 58% 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 rose by 3.5 MMBbl/d for the week ending January 13 and are about 8% below the five-year average for this time of year
US Retail gasoline prices climb for a fourth-straight week
In addition to rising crude oil prices, gasoline prices are rising as “continued refinery challenges kept supply of gasoline from rising more substantially,” Patrick DeHaan, head of petroleum analysis at GasBuddy, said in a Monday note
Additionally, President Joe Biden’s emergency petroleum release ended on December 31, 2022, according to the US DOE
AEGIS notes that as the nation begins to transition away from milder demand in the height of winter, concerns are rising that supplies may tighten in the weeks to come as demand increases
Retail diesel prices fell by 9c in the last four weeks to $4.604/Gal. About 39% 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 fell by 1.9 MMBbl/d for the week ending January 13 and are about 20% below the five-year average for this time of year
Oil refining margins (3-2-1 crack spread) hit a three-month high of $42/Bbl
High refining margins could be one of the leading indicators of higher gasoline and diesel costs
The U.S. refining system was hit by a storm recently, reducing operating capacity and, therefore, production of petroleum products
Additionally, refiners around the world are likely to do more maintenance this year than last, when they delayed it to cash in on record margins
Moreover, inventories of refined products, particularly middle distillates, remain low
Also, the EU’s sanctions on Russian fuel products are set to take effect on February 5, further limiting global supplies of refined products
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