However, the so-called refiners crack has jumped more than 50% since the first half of this month, from below $4 a barrel to over $6, for a yield to WTI of 7.7%. Through the first three sessions of this week the crack is averaging a relatively lofty $7 a barrel, 8.9% yield. Last year the 3:2:1 crack averaged $4.371 a barrel, with a yield of 6.1% to WTI through the first half of the fourth quarter.
However, the combination of the implosion in the energy bubble, coupled with this recession’s nadir pulled the crack below breakeven through the second half of the quarter; to minus $6.92 a barrel; for a negative yield to WTI of 12.2%. Thus, unlike a year ago, margins are now moving in a positive direction. As we can see in the chart in today’s issue of The Schork Report, this could translate into greater demand for crude oil once refiners return from maintenance.
Gasoline production is back… at least for one DOE report. Output as of last week was 4½% higher than the average of the prior two reports. What’s more, while overall shipments of gasoline are low (0.78 MMbbl/d over the last four weeks), imports of gasoline blendstocks have been coming in well above seasonal norms. That is a sign refiners are planning to ramp up production post turnarounds.
Gasoline supplies are certainly comfortable, i.e. 13.6 MMbbls (7%) above a year ago and 10.6 MMbbls (5.4%) above the 2003-07 timestep. Be that as it may, in light of Big Oil’s third quarter earnings’ reports and the obligatory shut-in announcements in the aftermath of the reported downstream carnage, traders on the NYMEX have grown quite uncomfortable regarding the future availability of gasoline. For instance, spot November RBOB has moved into a backwardation over the last two sessions.