The refining margins are based on Platts crude and product price assessments and yield modeling produced by Turner Mason.
The Midwest WTI cracking refinery margin averaged just $2.38/barrel the week ending September 25 from $4.20/b the prior week and $6.55/b the week ending September 4.
Daily Midwest WTI margins fell to $1.50/b on September 24, the lowest level since $1.05/b on March 19.
The Midwest West Texas Sour coking margin averaged $5.15/b the week ending September 25, down from $6.77/b the prior week and $9.10/b the week ending September 4.
In the US Gulf Coast, Light Louisiana Sweet cracking margins averaged $3.24/b the week ending September 25, the data showed, down from $3.92/b the prior day. Over the same period, the Mars coking margin slipped to $3.40/b from $3.82/b.
On the Atlantic Coast, the Bonny Light cracking and Arab Medium coking margins averaged $3.10/b and $1.59/b last week, respectively, down from $5.26/b and $3.10/b the prior week.
Spot product prices have fallen under the weight of mounting inventories and low demand. The LLS gasoline crack spread, for instance, has fallen to just 59 cents/b on September 25 from $4.98/b on September 2. Distillate crack spreads are looking better by comparison, but are not strong enough to justify ramping up crude runs.
This suggests refiners should continue to cut throughputs going forward until a sign of renewed refined product demand appears. That demand has yet to appear overseas, with the Northwest European Brent cracking margin averaging $2.28/b the week ending September 25, and the Singapore Dubai margin averaging minus 41 cents/b.
The weakening margins globally should lead to a growth in crude inventories, barring any disruptions or production cuts. In the US, a narrowing of the NYMEX crude contango could feed the surplus as well, as energy analyst Jim Ritterbusch pointed out in a report Tuesday.
"[R]ecent strength in the WTI curve should also facilitate high import levels toward 10 mb/d as floating cargoes in the Gulf of Mexico are released into the market," he said. "Although US crude supplies are already in surplus by more than 30 mb, this supply excess could easily expand."
The front-month NYMEX crude spread settled at minus 33 cents/b on September 28, from minus 54 cents/b on September 23 and minus $2.09/b in mid-August.
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