Refining crack spreads hit $65, offsetting crude oil price declines and limiting relief for consumers at the pump.
Refining crack spreads have surged to a record $65, widening the gap between crude oil costs and fuel prices. This margin allows refiners to turn a $71 barrel of crude into $136 worth of gasoline and diesel, keeping pump prices elevated despite lower oil prices.
The 3-2-1 crack spread model, which assumes three barrels of crude yield two of gasoline and one of distillate, reflects tightness in refined products rather than crude. Disruptions in refining capacity, including geopolitical constraints in regions like Hormuz, have exacerbated the supply squeeze.
Analysts warn that high diesel prices and transportation costs may continue to pressure broader consumer prices, limiting inflation relief in the near term.