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U.S. refiners surge as fuel shortages drive record diesel crack spreads
U.S. diesel crack spreads hit an all-time high of $102.20 per barrel as global refinery throughput in July lagged year-earlier levels by nearly 5 million barrels per day.
An energy crunch tied to the Iran war and related disruptions has intensified margins for U.S. refiners, with Reuters reporting that global refinery throughput in July ran nearly 5 million barrels per day below year-earlier levels. The report cited constrained Middle Eastern capacity and Ukrainian attacks that pushed Russian processing close to a 20-year low.
With refined-fuel supplies increasingly tight for diesel, gasoline, and jet fuel, U.S. refiners have moved in to export more product, running at or near record utilization rates. On Monday, the U.S. diesel crack spread reached an all-time high of $102.20 per barrel, according to the same Reuters account.
Shares of Marathon Petroleum, Valero Energy, and Phillips 66 have climbed sharply this earnings season, rising 110%, 98%, and 75%, respectively, outpacing the S&P 500 Energy sector’s 36% gain. With 88% of S&P 500 companies having reported second-quarter results, Energy posted the strongest earnings growth among the index’s 11 sectors at 147% year-over-year and revenue growth of 42.5%.
Within Energy, Reuters said Oil and Gas Refining and Marketing led sub-industries with earnings growth of 327%, followed by Integrated Oil and Gas at 177%, and Oil and Gas Exploration and Production at 117%. The story also noted that Marathon Petroleum delivered one of the quarter’s largest revenue beats, reporting $52.34 billion in revenue.
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