API Shows Further Crude Builds

By: Angela Agostinone / October 21, 2015

Yesterday ended with crude closing down $0.34/bbl to $45.55, RBOB up $0.0269/gal to $1.2783 and HO down $0.0004/gal to $1.4487.

API data released last night show that U.S. crude inventories had a 7.1 million barrel build, with only a 22,000 barrel build in Cushing, OK. There was a draw in gasoline of 694,000 barrels and a draw in distillates of 2.4 million barrels, but for PADD 1 there were small builds in both refined products. Refinery utilization is down 0.7% from last week; however, in PADD 1 it is down 2.6%.

Refined product crack spreads continue to decrease, due to the inventory builds and lower demand. A crack spread is the differential between the price of crude oil and the oil products refined from it to estimate refining margins. If a crack spread is a large positive number that means the price of refined products is higher than the price of crude oil, resulting in a profitable spread. However, the cost involved to actually refine the product has to be considered because it reduces the margin. Below are the calculated crack spreads from yesterday’s settles:

crackspreadex

Heating oil margins are averaging around $15/bbl and gasoline margins are only averaging $6/bbl this year. Below you can see the dramatic decrease in margin in just a few months, especially for gasoline.

crackspread

 


10_20_settle


Categories: Daily Market Update


Angela Agostinone

Written by

Angela Agostinone

Angela manages daily price changes from suppliers to ensure Guttman Energy customers are getting the most current and competitive rack prices. She is also responsible for relaying supplier product allocations to Guttman Energy's sales and logistics team, as well as analyzing specific benchmarks such as OPIS, Platts, and Argus to ensure each customer is getting the greatest value from their contracted fuel purchases.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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