refinery margin

Recent third quarter earnings reports from US refiners have reflected lower refining margins squeezed by higher feedstock prices for inland crudes like West Texas Intermediate (WTI) rising to the same level as coastal crudes like Light Louisiana Sweet (LLS) while product prices stood still. In the past two weeks domestic crude prices have fallen below $100/Bbl in the face of a Gulf Coast supply glut. But despite lower crude costs, refinery margins have continued to weaken. The primary culprit has been sharply falling gasoline prices. Today we review what Gulf Coast refiners could do to improve margins.

Refiners ultimately determine crude price values. Refining margins vary by location, crude quality, product prices and refinery configuration. Today we return to the Bakken to conclude our series: The Bakken Buck Starts Here – Bakken Crude Pricing Part IV - to discover that a longer journey to market might just be the most profitable.