Truckers are paying through the nose for diesel…why was revealed by a Wall Street Journal analysis late last year.
Truckers are paying through the nose for diesel…why was revealed by a Wall Street Journal analysis late last year.
Because breaking a barrel of crude into its component parts yields ~44% gasoline and only 29% distillates (Diesel), refiners are running a lot more gasoline than they need just to supply the diesel the market demands. Inventories of diesel are below their 5 year average by 11%! Hence producing one barrel of gasoline yields about $1.50 as of the Friday before Christmas, compared with an average $12 going back to 2012. In contrast, diesel margins were recently at $19 a barrel, compared with a longer-term average of $15.
What to expect – it isn’t likely to get any better as the crude coming from fracking is light and hasn’t historically been good for diesel production.
