Transportation Fuels First Look - US refiners scale back crude intake as fuel stocks swell and margin weakness

• 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 1.3 MMBbl for the week ending August 2 and are 2% below the five-year average for this time of year

US refiners scale back crude intake as fuel stocks swell

• U.S. refiners reduced crude processing rates to 16.6 MMBbl/d by Aug. 2, the slowest for this time of year since 2020, as fuel inventories increased and refining margins declined

• Refiners utilized 90.5% of their capacity, down from 93.6% a year earlier, with companies like Marathon, Valero, and Phillips 66 announcing cuts in processing rates

• Refining activity had surged earlier in 2024, reaching 19.2 MMBbl/d in May, driven by low fuel inventories and high refining margins, but has since decreased as stocks replenished

• Gross refining margins dropped to $24/Bbl in July, down from $31 in March, leading refiners to reduce output to prevent further inventory buildup and margin erosion

• 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 0.9 MMBbl for the week ending August 2 and are about 6% below the five-year average for this time of year