- Retail regular gasoline prices rose by 16.1c in the last four weeks to $3.310/Gal. About 55% 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 4.1 MMBbl/d for the week ending January 6 and are about 7% below the five-year average for this time of year
- U.S. Retail gasoline prices rose for three-straight weeks despite a slump in demand
- EIA weekly retail gasoline gained 21.9c since Dec 26 despite a seasonal weakening in gasoline demand
- EIA data shows that gasoline demand fell from 9.33 MMBbl/d for the week ending Dec 23 to 7.56 MMBbl/d last week
- Gasoline demand typically declines during this time of year, and according to AAA, it is unlikely to pick up until closer to Spring Break
- “So the primary factor in this latest increase is the higher cost of oil, which accounts for more than half of what you pay at the pump,” said Andrew Gross, AAA spokesperson
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- Retail diesel prices fell by 25.4c in the last four weeks to $4.524/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 1.1 MMBbl/d for the week ending January 6 and are about 18% below the five-year average for this time of year
- Europe rushes to buy diesel from Russia before a ban on fuel imports comes into effect on February 5 (BBG, Reuters)
- European diesel imports from Russia are at 0.770 MMBbl/d so far this month, the highest since March 2022, according to energy analytics firm Vortexa
- The EU needs to replace about 0.6 MMBbl/d, some of which are expected to come from the US and India
- Additionally, the massive rerouting of global diesel flows triggered by the new sanctions on February 5 could result in higher pricing
- The G7 and EU are designing a price cap mechanism for Russia's refined fuels similar to the one used for seaborne Russian crude on December 5
- AEGIS notes that with an embargo on Russian products looming, the distillate market could tighten further amid increasing travel and a lack of refining capacity
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