US oil refining margins hit 3-month highs as manufacturing unit outages mount | Jobi Cool

By Shariq Khan

(Reuters) – U.S. oil refining margins hit a three-month excessive on Tuesday and are prone to be headed greater, analysts stated, as unplanned refinery outages weigh on already tight gas provides.

The outages have pushed up gasoline costs in Texas and Oklahoma this 12 months forward of what’s anticipated to be a heavier-than-usual turnaround season for refiners. The rising costs and margins are uncommon for this time of 12 months, when journey declines.

The crack unfold, a key gauge of refinery earnings that measures the distinction between crude oil costs and promoting costs for completed merchandise, hit $42.41 on Tuesday, the best since October. The five-year common for January is $15.56, an evaluation of Refinitiv Eikon knowledge confirmed.

Common gasoline costs in Texas hit about $3.07 per gallon. gallon Tuesday, up practically 44 cents from a month in the past, in line with the AAA motor group. Oklahoma drivers additionally pay about 45 cents extra at $3.13 per gallon, AAA knowledge confirmed.

A diesel-producing unit at PBF Vitality’s Chalmette, Louisiana, refinery was shut down after a fireplace on Saturday. It may be out for a minimum of a month. Exxon Mobil stated Monday it’s going to carry out scheduled upkeep on a number of items at its petrochemical complicated in Baytown, Texas.

The continuing refinery upkeep season could possibly be for much longer than standard, with many US Gulf Coast refineries nonetheless working beneath capability after Winter Storm Elliott knocked about 1.5 million barrels per day of refining capability in December. A Suncor refinery in Commerce Metropolis, Colo., has been offline because the storm.

Many overhauls had been additionally delayed by the pandemic, and refiners at the moment are planning twice as many overhauls this spring as standard, placing extra strain on gas provides.

Gasoline inventories are low relative to historic ranges, “so there’s little margin for error,” stated Rob Thummel, portfolio supervisor at Tortoise. US gasoline shares are about 10% beneath regular and diesel about 20% beneath regular.

An upcoming ban on Russian seaborne gas cargoes will place new calls for on American refined merchandise, stated Ole Hansen, head of commodity technique at Saxo Financial institution.

“Supply of diesel to Europe from the US and the brand new refinery hub within the Center East might account for among the lacking barrels from Russia, however a scarcity seems probably,” Hansen stated.

(This story has been re-archived to insert a lacking phrase within the headline)

(Reporting by Shariq Khan; Enhancing by Stephen Coates)

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