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
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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