By JENNY GROSS
LONDON -- Refiners that produce gasoline can make more money
per barrel now than they could at any point in the last two
years, and analysts said this week that the product could
become even more profitable in the coming months as the US
enters its peak summer driving season.
string of refinery closures on the US East
Coast has left a gap in the market and this could provide
support for prices to go higher, analysts said.
The current price spike was partly due to the switching to
summer grades from winter grades by refineries, Olivier Jakob,
managing director of Swiss consultancy Petromatrix, said.
"Right now, the overall stock situation in the US doesn't
seem catastrophic, but when the Sunoco refinery goes down, it will be
difficult to meet demand," Jakob said.
Sunoco will shut its Philadelphia refinery, which produces
335,000 bpd, in July if it can't sell it and exit the
Since September, ConocoPhillips shut its 185,000 bpd
Trainer, Pa., refinery and Sunoco closed its 178,000 bpd Marcus
Hook, Pa., refinery.
Those refineries, plus the Sunoco Philadelphia plant, make
up 50% of East Coast refining capacity.
European gasoline cracks, a measure of profit by refiners,
Wednesday hit $16.47/bbl, their highest level in at least two
years, according to data from Marex Spectron, a financial
products broker in the commodities sector.
"The US arbitrage looks closed for now, so if demand kicks
in and the US starts pulling again, and on top of that we face
a heavy driving season and a hurricane it will get really
nasty," a Europe-based gasoline trader said.
Hurricanes in the US can cause refineries to shut until they
The US is the world's largest gasoline consumer and European
prices rely heavily on demand fluctuations there.
Dow Jones Newswires