This week's statistical report from the Energy Information Administration had some interesting numbers about what refiners are doing in the fact of enormously profitable diesel margins, and gasoline margins that are weak and unattractive.
As Platts' Linda Rafield reported in her analysis of the numbers, US refiners actually saw their distillate output drop on an absolute basis, down 111,000 b/d to 4.625 million b/d from the previous week's record-setting 4.736 million b/d. But given that refinery runs overall were down, that's not surprising.
More interesting is that the distillate yield -- the amount of distillate that comes out of the entire refining process -- set another new record. It rose to a historically high 30.17%, "as refiners looked to cash in on a $25/barrel crack spread," Linda reported. The NYMEX heating oil crack has on average been trading at a $22/barrel premium to the RBOB crack spread.
All that output, even with continuing high exports of diesel fuel to Europe, are letting inventories build, which is good news for consumers. Total distillate stocks built another 2.4 million barrels to 128.1 million barrels. That level put them about 4.5 million barrels above the five-year average, and almost as much above last year's level.
As Linda reported, total refinery yields were an "eye-popping" 104.55%, "suggesting if a refiner can use a heavy sour grade of crude, that's what they are doing to maximize production. And the 104.55% total refining yield occurred with utilization rates falling to just 87.1%, not a typical level during peak driving season.
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