The national average price of gasoline rose 25 cents for a second straight week to $4.56 a gallon, the highest level since the summer of 2022. Meanwhile, crude oil fell more than $7 on Wednesday, settling below $96 a barrel as ceasefire talks aimed at reopening the Strait of Hormuz advanced.
The Pump Tells One Story. The Barrel Tells The Other.
“Gasoline prices continue to face upward pressure from global supply concerns,” the AAA stated.
The 3-2-1 crack spread, the standard proxy for refining profit margins, just printed $56.22 a barrel on Thursday, its highest level since the post-Ukraine energy shock of June 2022.
When crude falls and pump prices keep climbing, refiners pocket the difference on every barrel they process.
According to U.S. Energy Information Administration data, U.S. crude inventories fell by 2.3 million barrels last week to 457.2 million, while gasoline demand softened from 9.1 million barrels per day to 8.81 million.
Demand cooled. Crude eased, but pump prices kept climbing.
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What The Crack Spread Is, And Why It Matters Now
The crack spread is the gross margin a refinery captures for converting crude oil into gasoline and diesel.
The industry-standard 3-2-1 formula assumes that three barrels of crude are refined into two ...
