Falling Gas Prices Have Not Been Good News For US Refiners

Refined products are attempting to find a floor after dropping by more than a dime in the first three days of the week. RBOB futures are trading modestly higher for a 2nd straight day, while ULSD futures are set to snap a 4-day losing streak.
Yesterday’s CPI report brought the first negative inflation reading for a month in 4 years, with lower gasoline prices the main contributor to the decrease. Stock market investors had mixed reactions to the report as the tech bubble looks like it may be starting to burst.
Falling gas prices have not been good news for US refiners that are seeing margins slide close to break-even levels at the time of the year that often brings their best profits. Crack spreads have recovered marginally in the past week but will still be cause for concern as summer starts to wind down.
Russian officials are recommending another ban on most gasoline exports as ongoing attacks by Ukrainian drones, and the upcoming peak demand season are creating concerns over domestic shortages.
Marathon was reportedly attempting restart at its Galveston Bay (FKA Texas City) refinery Thursday after Hurricane Beryl knocked out power to the facility and once again exposed weaknesses in the state’s power grid. A report Wednesday from the Dallas Fed discusses the challenges in meeting the state and country’s growing demand for electricity.
While Hurricanes are the most talked about threat to refineries, heat waves are becoming more of a concern, particularly in Europe as facilities are struggling to maintain steady rates as temperatures rise.
Click here to download a PDF of today's TACenergy Market Talk.
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Energy Markets Surge After Israel Launches Major Airstrikes On Iran
