- Retail regular gasoline prices fell by 19c in the last four weeks to $3.231/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 rose by 1.8 MMBbl for the week ending November 24 and are about 2% above the five-year average for this time of year
- Gasoline demand remains weak as winter approaches
- US crack spreads have fallen sharply from 2022 levels but have improved from October lows, now trading at $13.40
- The combination of low U.S. gasoline demand, the recent decline in oil prices, and the seasonal transition to winter-grade gasoline has led to reduced profitability in gasoline production
- Additionally, total motor gasoline inventories increased by 1.8 MMBbl from last week and are about 2% below the five-year average for this time of year
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- Retail diesel prices fell by 31.8c in the last four weeks to $4.092/Gal. About 46% 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 5.2 MMBbl for the week ending November 24 and are about 11% below the five-year average for this time of year
- Panama chaos grows as US diesel shippers bypass canal (Argus, Bloomberg)
- The Panama Canal's drought-induced bottlenecks are forcing a U.S. diesel shipper to detour via South America's tip to Chile, a first since 2020
- Bypassing the canal adds about a week to transit time amid near-record freight rates
- Fuel shipping costs from the US Gulf Coast to Chile have doubled since early 2023, reaching a record $4.6 million per shipment
- US refiners typically reroute cargoes to Europe via the Atlantic when the Panama route is congested, but the current delays, unlike previous maintenance-related ones, are expected to worsen with upcoming tighter shipping restrictions
- US diesel margin sinks to four-month low (Bloomberg)
- NY Harbor ULSD-WTI crack spread fell to $37.74/Bbl on Dec. 1, marking the lowest level since July
- Distillate demand saw a significant decline of 1.1 MMBbl/d, the largest weekly drop since the end of 2016
- This sharp decrease in demand could’ve likely contributed to the largest weekly increase in diesel inventories this year, i.e., 5.2 MMBbl
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