Price of diesel following refining margin

Global demand has a direct impact on refining margins, which in turn impact the price of diesel

By LYNDON FINNEY
The Trucker Staff

6/24/2008

WALTHAM, Mass. — The refining margin for diesel appears to be having a definite impact on the price at the pump.

In a recent interview, Mary Novak, managing director of North American Energy Services at Global Insight, noted that the rapid rise in diesel prices had been caused by higher refining margins as much as higher crude oil prices.

Demand has a direct impact on refining margins, she noted. Recently, demand has been declining and so have refining margins.

In early June, the refining margin reached $32.67 a barrel.

By June 10, it had dropped to $31.10 and as of June 17, the latest day for which data is available, it had dropped to $28.41.

Diesel prices followed suit: during June, the price of on-highway diesel has dropped from $4.707 for the week ending June 2 to $4.648 for the week ending June 23.

Meanwhile, the price of West Texas Intermediate (WTI)  crude at Cushing, Okla., (a hub at which WTI and other domestic crude oils come together), was $124.33 a barrel in early June, but had risen to $131.38 on June 10 and $133.99 on June 19.