U.S. Sees Lower Gasoline Margins on Winter Grade Sell-off, RINs Cost Decline

2017-03-07 07:51:46 EST
U.S. Sees Lower Gasoline Margins on Winter Grade Sell-off, RINs Cost Decline

Gasoline margins in the U.S. were broadly down last week as refiners unload
winter grade product, and as RIN costs declined, according to a weekly margin
summary report issued by Barclays Capital on Monday.

U.S. oil refining margins decreased on average by $0.60/bbl last week.

The first quarter 2017 quarter-to-date (1Q17 QTD) U.S. margins are $0.40/bbl
lower than the fourth quarter 2016 quarter-to-date (4Q16 QTD), and $1.10/bl
higher than the first quarter 2016 quarter-to-date (1Q16 QTD).

Gulf Coast WTI Cushing 3-2-1 showed the largest decrease, down $2.70 to
$11.10/bbl, while Pacific Northwest showed the largest increase, up $3.20 to
$18.40/bbl.

Mid-Continent was down $0.20 to $11.90/bbl, and Rocky Mountain region fell $1.10
to $10.90/bbl. Midwest gained $0.50 to $15.80/bbl, and Southwest was up $0.10 to
$21.80/bbl.

L.A. margin fell by $1.60 to $13.20/bbl, and Northeast dropped a dollar to
$3.20/bbl.

Gulf Coast LLS 6-3-2-1 stood at $5.0/bbl, down $2.60 from the prior week.

U.S. Gulf Coast jet crack decreased $1.80 to $8.70/bbl, and U.S. Gulf Coast
regular gasoline margin decreased $3.70 to $7.10/bbl.

U.S. Gulf Coast alkylate margins over regular Gulf Coast gasoline are averaging
$10.10/bbl in 1Q17 QTD compared to 4Q16 of $8.70/bbl and 1Q16 of $13.70/bbl,
while U.S. Gulf Coast reformate margins are averaging $19.70/bbl in 1Q17 QTD
compared to 4Q16 of $16.10/bbl and 1Q16 of $24.90/bbl.

Last week, WTI Cushing/WCS (Western Canadian Select) increased $1.10 to
$14.30/bbl, while LLS/WTI Cushing increased $0.30 to $1.80/bbl.

LLS/Maya (Mexico Heavy Sour) was flat at $9/bbl, while LLS/Mars (Gulf Coast
Medium Sour) decreased $0.20 to $3.70/bbl.

WTI Cushing/WTS (West Texas Sour) decreased $0.40 to $1.30/bbl, while Brent/WTI
Cushing decreased $1.10 to $0.70/bbl.

Lastly, Brent/LLS (Louisiana Light Sweet) decreased $1.30 to negative $1/bbl.

Based on the average calendar month price for WTI Cushing and the average trade
month differential for Bakken, LLS, Canadian Mixed Sweet, Syncrude, WCS and WTI
Midland, Barclays estimates the implied February 2017 trade month prices at
$52.60/bbl, $55.20/bbl, $51.70/bbl, $54.20/bbl, $39.10/bbl and $54.50/bbl,
respectively.

International margins were down. Japan and Singapore both decreased $1.50 to
$4.30/bbl and $5.30/bbl, respectively. Northwest Europe medium decreased $0.90
to $2.50/bbl.

Integrated U.S. marketing margins were up. Gulf Coast and California showed the
largest increased (up $3.90/bbl and $3.20/bbl, respectively).

Gasoline pump prices increased $0.03/gal compared to last week's estimated
national average price.

--Edgar Ang, eang@opisnetcom



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