A key theme for 2023 is recovery in the demand for jet fuel and gasoline, supported by a stronger summer driving season,' PBF Energy's CEO Thomas Nimbley said in early May. 'Despite recent declines, refinery margins also remain well above mid-cycle, but have moderated from the distillate to '22 levels.

refiners said on the Q1 earnings calls earlier this month. Refining margins have fallen since the fourth quarter of 2022, but they are still higher than historical norms, executives at some of the top U.S. Distillate fuel inventories declined by 4.2 million barrels last week and are about 16% below the five-year average for this time of year.Īccording to Reuters market analyst John Kemp, gasoline crack spreads remain strong ahead of the driving season, but diesel cracks are weaker amid concerns of weakening diesel demand, one of the first signs a recession may be looming. In the week ending May 5, total motor gasoline inventories fell by 3.2 million barrels and were about 7% below the five-year average for this time of year. The oil market, however, is ignoring these fundamentals as investors and speculators focus on concerns about economic growth and a potential slip in fuel demand in case of a full-blown recession later this year. refiners are optimistic about cracks going forward, and most do not see signs of fuel demand dropping.Īs we head into the driving season and peak annual gasoline demand, the tight gasoline and diesel markets are bullish factors for oil prices. refining margins.Īlthough global refining margins have halved since February as Russian oil supply remains elevated despite the embargoes, U.S. gasoline and diesel inventories are drawing down and sitting below the five-year average for this time of the year, pointing to resilient fuel demand and supporting both crude oil prices and U.S.

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