Seeing as how refiners were losing money for parts of this week refining oil into gasoline, utilization was low. It is rare, but refiners were losing some money last week as the cost of a barrel of oil was *more expensive* than the cost of their finished gasoline. They were losing cents on refining every gallon of gasoline.
Having said that, here are some numbers:
- Refinery utilization dropped to 82.2%- until the “crack spread” or earnings for each barrel of gasoline exceeds the cost of a barrel of crude, this will stay low. The only way that utilization will rise is if pump prices rise.
- Crude oil inventories remained unchanged from last week, even though much less crude was produced/imported than usual.
- Gasoline stockpiles fell 3.3 million barrels. This isn’t a surprise due to the issues I stated above about no profit from refining
- Midwest PADD storage fell to 56+ million barrels from 59+. This is a large drop and we may see any Chicago Discount begin to dry up.
This was a bad report, but local stations have already hiked to way over my previous target of 3.25-3.29. I believe we may see a rehike tomorrow to $3.45-$3.49, so keep an eye out between 9am-10am.
We’re back to usual here folks- pump prices will “march” higher to begin April!
Patrick
Question for someone…
I’ve been hearing, time & time again, that the wholesale prices are cheaper than they were one year ago, but we are paying more. I’m also hearing that there was a station in detroit that lowered their price to $2 recently and had a ‘mob’ so to speak, and the police forced the station to raise thier prices.
Do you know if either are truth? I have heard this many times lately and I don’t know where this is coming from. Possibly a spoof email? I don’t know.
Wholesale prices are not cheaper than they were one year ago.
There was a station, I don’t recall if it was in Detroit- there was a gas price war and one owner got sick of it and lowered his price to $1.99. There was such an influx of cars that Public Safety was at risk and Police requested he change the price of his gasoline.
Hope that helps!
Patrick