Refiners pinched as gas price falls faster than oil

Crude oil prices tumbled below $50 Thursday for the first time since May 2005 as jobless claims hit a 16-year record and financial markets sank.

But oil refiners, the chief buyers of crude, aren’t celebrating. Gasoline prices are falling even harder and faster, so U.S. refiners are losing money on every gallon of gasoline they sell. Light sweet crude plunged 7% to $49.62 a barrel. Wholesale gasoline in the Gulf: $40.74 a barrel.


Such topsy-turvy economics have happened on occasion for a few days. But the current pricing turnabout has lasted seven weeks and could persist a few more months, says Tom Kloza, chief oil analyst with the Oil Price Information Service.

“It’s unprecedented,” Kloza says. Although refiners offset their gasoline losses with profits on diesel fuel, “if your feedstock costs more than your marquee product, you’ve got a problem.”

USA Today