- 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
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- 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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