Schork Oil Outlook: Refiners Can't Afford Crude

It looks like we are ramping up turnarounds. Capacity utilization rates plunged by 292 bps to 78.4%. In fact, last week

However, in light of poor economics, refiners have an incentive to move up their maintenance schedules this season. Refinery throughput is low because of poor margins. Margins are poor because refiners cannot pass along inflated crude oil costs to consumers.

To wit, the amount of gasoline supplied to the market averaged 18.8 MMbbl/d over the last four weeks. That is 1.6 MMbbl/d or 7.7% below the five-year average.

Thus, with consumers apparently unwilling to buy what the refiners are selling, refiners will be unwilling to make it