04-15-09 by duga
Oil prices are still moping around the $50 a barrel level worldwide, but that doesn’t mean major oil companies just sit around and weep. They’re making bigger profits than last year on the refining end of the business, making that cheap oil into profitable gasoline. At least that’s the case in Europe, where the French oil giant Total says European refining margins are up 41% over last year. And since U.S. refining margins, an indicator of profit, are often bigger than Europe’s…
So the price of crude oil may be just over one-third what it was at its peak last summer, but by cutting back production of gasoline and diesel, the refining end of the business is still profiting. That would help explain why crude oil is down 65% from its peak, and U.S. gasoline prices nationally are down by just 50% (and rising), even though demand is still sinking.
Oil company profit reports coming out soon will have the U.S. side of the refinery story.