US Refiners

Record runs allowed U.S. refiners to continue a multiyear streak of strong margins in 2018 despite higher crude prices during the first three quarters and a weaker fourth quarter after product prices tanked along with crude in October. While rising crude prices threatened refinery margins, a high Brent premium over domestic benchmark West Texas Intermediate (WTI) kept feedstock prices for U.S. refiners lower than their international rivals. The availability of discounted Canadian crude also helped produce stellar returns for Midwest, Rockies and Gulf Coast refiners that are configured to process heavy crude. Product prices only weakened in the fourth quarter when gasoline inventories began to rise. Today, we highlight major trends in the U.S. refining sector during 2018 and look forward to 2019.

West Texas Intermediate (WTI) crude prices reached $110.53/Bbl last Friday, their highest daily settlement since May 2011 - in response to expectations of a US military attack on Syria. The sudden prospect of a Russian brokered peaceful solution to the Syrian chemical weapons crisis prompted a $3/Bbl fall in WTI prices since then. These wild price gyrations in response to events far away continue to impact US crude markets so long as we are major importers.  Today we look at how the Syria crisis affects the US oil market.