After years of trying to reduce gasoline production in favor of diesel, U.S. refiners are once again relying on America’s favorite motor fuel to drive profits. Gasoline is the best-performing member of the Bloomberg Commodity Index this year. Demand is the highest since 2007 as Americans drove the most miles ever over the first five months of 2015. The price at the pump is 24 percent less than a year ago, thanks to a global oil rout. “We certainly expected some price demand elasticity for gasoline,” Gary Simmons, senior vice president for Valero Energy Corp., said on a conference call Thursday. “As long as we see the lower prices I think we expect the demand response to continue to be good.” Valero, the second-biggest U.S. independent refiner, said Thursday it’s maximizing gasoline production as it posted its best quarterly results since 2007. The fuel is averaging almost 23 cents over diesel this quarter, the most in 8 years. The pivot to gasoline comes as the shale boom has brought a flood of light crude that yields more gasoline components, and after the company spent $3 billion building two hydrocrackers in 2013 to boost diesel production. Valero’s $2.66-a-share profit beat a … continue reading
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Source: CTRM Center