EIA: Surging Crack Spreads Elevate U.S. Retail Fuel Costs


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Elevated refining margins are largely responsible for 
driving U.S. retail fuel costs higher in recent months, aside from rising crude 
prices, an analysis published Friday (9/4) by the U.S. Energy Information 
Administration stated.

   Since May, the New York Harbor gasoline crack spread averaged about $1 
gallon above 2025 levels, when regional crack spreads peaked near 60 cents per 
gallon, the EIA noted.

   Prior to that, New York Harbor gasoline crack spreads held in a seasonal 
winter-to-spring range of 30-60cts gallon while regional cracks stood at 
20-40cts gallon across midcontinent and Gulf Coast hubs, historical EIA data 
shows.

   The latest surge is primarily due to acute global supply tightness stemming 
from operational disruptions across processing hubs in Russia, China, and the 
Middle East, the EIA analysis said.

   The global shortfall has constrained domestic supply balances by 
simultaneously raising import costs for coastal markets and pulling U.S. 
product into export channels.

   Since March, total U.S. imports of finished gasoline and blending components 
dropped 32% below the five-year average, forcing greater reliance on U.S. Gulf 
Coast waterborne shipments moving under limited Jones Act waivers.

   Distillate processing margins have experienced even sharper expansion, with 
New York Harbor distillate crack spreads averaging 74cts gallon above gasoline 
cracks since March as domestic refiners maximize middle distillate yields.

   Refinery outages in Russia and the Middle East left U.S. distillate 
inventories 14% below five-year average levels as of late August, compared to a 
6% deficit in gasoline.

   Retail regular gasoline prices on the Monday before Labor Day averaged $4.07 
gallon nationally, led higher by the West Coast at $5.21 gallon, and the Rocky 
Mountain region at $4.27 per gallon. Gulf Coast retail prices remained the 
lowest nationwide, averaging $3.62 gallon.

    




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