No Mas, refiners wave the white flag as the Energy Information Agency report that US refinery runs plunge 10% to 80.5 percent! That puts refinery runs below the five year average of 81.4 percent causing a steep drop in gasoline and drop in distillates setting off a firestorm of buying in the petroleum complex. Keep in mind that that this is a five year average that includes two major hurricane related shut downs. In other words refiners are running like they were hit by a hurricane and if you look at their margins for profit for doing business they kind of were. His was the the third lowest run rate of the last 10 years, excluding 2005 and 2002.
Refining profit margins have fallen 83% in the last nine weeks a drop that has refiners just shutting down. If you can’t make a profit making a product why bother. And what is more it is likely that if demand and margins do not pick up soon we could see further cuts in runs and also in supply. The cuts supported crude as the market thinks that refiners will focus on only the highest yielding crude oil not wasting effort on the lower yielding stuff.....read the entire article.
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