Higher U.S. gasoline production and inventories are reducing gasoline crack spreads (6/15/2016)

U.S. refiners are shifting their output mix to increase the gasoline production share and reduce the distillate production share, which is increasing gasoline inventories and beginning to reduce the gasoline crack spread-the difference between gasoline futures prices and crude oil. Monthly average gasoline crack spreads are now lower than they were last year, the second consecutive month of year-over-year declines. While distillate crack spreads are also lower than last year, they are only 3 cents per gallon (gal) lower than the five-year average and have increased 9 cents/gal over the past two months. Changing gasoline-to-distillate production ratios are a contributing factor in the difference in crack spreads. ... More »