In this list
Oil

Refinery margin tracker: US cracking margins supported by strong gasoline demand

Agriculture | Grains | Energy | Coal | Thermal Coal | Oil | Crude Oil | Metals | Steel

Market Movers Asia, Nov. 28-Dec. 2: COVID-19 lockdowns hit steel demand in China

Energy | Oil | Refined Products | Jet Fuel

Jet Fuel

Biofuels | Renewables | LNG | Natural Gas | Oil | Petrochemicals | Marine Fuels | Tankers | Crude Oil | Refined Products | Bunker Fuel | Gasoline | Jet Fuel

APPEC 2022

Agriculture | Shipping | Grains | Biofuels

Australia wheat prices ease on harvest pressure, better supply prospects

Energy | Oil

Fuel for Thought: Russian crudes come under renewed pressure as G7 price cap nears

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Refinery margin tracker: US cracking margins supported by strong gasoline demand

  • Author
  • Janet McGurty    Seth Clare
  • Editor
  • Jennifer Pedrick
  • Commodity
  • Oil

New York — US cracking margins gained last week as strong economic indicators supported rising gasoline demand, aided by healthy export demand for refined products, an analysis by S&P Global Platts showed Monday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

This was an about-face from the record-high inventories and low cracks at the beginning of the year.

"We've got full employment, [gasoline] demand is hanging up at 9.3 million b/d," said PBF CEO Tom Nimbley on the May 1 first-quarter results call.

Nimbley said gasoline demand could prove to "have some legs" which could have PBF shifting to "maybe a not max but very heavy gasoline mode."

While all regions showed stronger margins, the US West Coast continued to lead the rise, driven by unplanned regional refinery outages as margins hovered near record levels.

Canadian Mixed Light Sweet cracking margins averaged $34.59/b for the week ended May 3, up from the $34.22/b the week earlier, Platts margin data showed. This compares with the $19.77/b Q1 cracking margin.

Platts margin data reflects the difference between a crude's netback and its spot price. Netbacks are based on crude yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.

The most recent fire at Phillips 66's 139,000 b/d Carson refinery in California was minor, as the plant had just restarted from a March fire affecting a crude unit.

S&P Global Platts Analytics expects 529,000 b/d of West Coast crude distillation capacity offline for the week ended May 3, down from the 670,000 b/d offline the week ended April 26.

PBF's 160,000 b/d Torrance, California, refinery benefited from the recent outages, as the plant recently returned from a 50-day turnaround on the 62,000 b/d coking unit.

"We've had some very good cracks out overall out in California," Nimbley said.

USGC GASOLINE EXPORTS HEAD TO WEST AFRICA

US gasoline exports are expected to rise to 800,000 b/d for the week ended May 3, according to Platts Analytics, up from the 688,000 b/d exported in the previous week as reported by the Energy Information Administration.

US Gulf Coast refiners are the biggest exporters of gasoline, while Mexico is the largest importer, bringing in 531,000 b/d on average in February 2019, EIA data showed.

And USGC cracking margins for West Texas Intermediate - the light, sweet crude of choice used by Valero and other refiners - averaged $14.26/b the week ended May 3, Platts margin data showed, supported by strong export demand.

"We ... continued to maximize product exports into higher netback markets into Latin America," said Valero's CEO Joe Gorder on the company's April 25 Q1 results call.

"Additionally, product shortages, particularly in Central and South America should continue to support robust exports," he added.

West Africa has also been seen pulling in more gasoline barrels so far this year. Platts shipping data show six clean tankers were put on subjects to go from the USGC to West Africa in the first four months of this year compared with the three last year.

"Nigeria is the biggest consumer of gasoline in the WAF region," one USGC market source said. "Once it gets there, the gasoline can then be trucked to the other WAF countries" that do not have coastal import terminals.

US Atlantic Coast Refining Margin Averages ($/b) Bakken cracking Bonny Light cracking Arab Light cracking Hibernia cracking
Week ending May 3 16.86 13.08 7.26 12.79
Week ending Apr 26 16.45 12.92 7.31 12.7
Q2 to date 14.91 12.47 6.75 12.18
Q2-18 10.83 10.97 8.93 8.16
Q1-19 8.8 7.82 2.8 6.69
Q4-18 18.86 7.61 6.31 5.82
US Gulf Coast Refining Margin Averages ($/b) LLS cracking Mars coking Maya coking WCS coking
Week ending May 3 11.04 8.22 10.12 15.27
Week ending Apr 26 10.03 8.12 10.25 13.78
Q2 to date 10.87 8.45 9.45 12.43
Q2-18 10.8 10.76 14.38 18.57
Q1-19 8.4 5.51 4.55 10.28
Q4-18 8.38 7.12 3.06 34.59
US Midwest Refining Margin Averages ($/b) Bakken cracking WTI cracking WTS coking WCS coking
Week ending May 3 20.09 17.4 23.08 24.42
Week ending Apr 26 19.17 16.04 21.18 22.47
Q2 to date 18.42 16.07 19.7 20.83
Q2-18 12.35 10.74 20.26 23.76
Q1-19 9.65 9.79 10.88 14.05
Q4-18 19.67 10.37 17.36 39.21
US West Coast Refining Margin Averages ($/b) ANS cracking Mixed Light Swt cracking Escalante coking Oriente coking
Week ending May 3 21.2 34.59 21.89 24.67
Week ending Apr 26 18.65 34.22 19.21 22.04
Q2 to date 19.64 32.11 20.29 22.62
Q2-18 10.69 29.4 14.25 16.65
Q1-19 10.38 19.77 10.16 12.04
Q4-18 11.44 44.17 10.07 13.93
Singapore Refining Margin Averages ($/b) Arab Heavy cracking Arab Medium cracking Dubai cracking Qatar Land cracking
Week ending May 3 0.83 -0.28 3.82 3.31
Week ending Apr 26 0.31 -0.71 3.22 2.85
Q2 to date 1.09 0.06 4.03 3.55
Q2-18 3.42 2.78 6.02 4.33
Q1-19 1.74 0.97 3.51 2.94
Q4-18 2.34 1.43 4.63 3.31
ARA Refining Margin Averages ($/b) Arab Light cracking Brent cracking Houston light sweet crack Urals cracking
Week ending May 3 6.6 7.01 8.14 6.2
Week ending Apr 26 5.87 5.88 6.27 5.67
Q2 to date 6.35 6.13 7.02 5.88
Q2-18 6.81 5.97 7.25 7.26
Q1-19 4.15 4.64 5.19 5.01
Q4-18 5.74 5.65 6.44 6.55
Italy Refining Margin Averages ($/b) Urals cracking Azeri Light cracking CPC Blend cracking Houston light sweet cracking
Week ending May 3 5.26 5.67 5.19 5.32
Week ending Apr 26 4.99 5.03 4.79 4.23
Q2 to date 5.3 5.59 5.41 4.84
Q2-18 7.3 7.17 6.37 6.29
Q1-19 6.1 7.13 6.95 4.36
Q4-18 5.9 6.4 5.82 4.4
Source: S&P Global Platts; Turner, Mason & Co.

-- Janet McGurty in New York and Seth Clare in Houston, newsdesk@spglobal.com

-- Edited by Jennifer Pedrick, newsdesk@spglobal.com