US refiners are turning crude oil into products like gasoline and diesel at a pace not seen since before the Covid-19 pandemic, but even that is unlikely to rein in soaring prices soon amid a historic fuel crunch.
Refineries last week processed 17 million barrels of crude oil a day, according to the Energy Information Administration, in a full-throttle effort to meet global and domestic fuel demand. That’s the highest weekly average since September 2019.
In the Midwest, refineries processed the most crude on record in a week.
Global fuel supplies are perilously tight, incentivizing refiners to go all-out to capture exceptionally strong profit margins, said Matt Smith, director of commodity research at Kpler. Fuel markets have been left with little cushion after outages stemming from wars in Ukraine and Iran.
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“Super-sized refining margins continue to encourage refiners to run as hard as possible, resulting in a solid draw to crude inventories,” Smith said.
Despite the surging processing rates, US consumers aren’t likely to see much relief at the pump soon. US fuel markets still look tight, with gasoline and diesel futures rising. That means further headaches for US drivers staring down $4-a-gallon gasoline and another wrinkle for central bankers desperate to tamp down inflation.
But the impacts of the push are visible in US commercial crude stockpiles, which dipped to their lowest since 2018, falling by more than 7 million barrels, the EIA data indicated. It’s another sign that oil-market buffers are thinning as tensions in the Iran war simmer.
