Summer Road Trips, Falling Crude Prices Pump Up Refiners’ Profits
Summer road trips and a pullback in crude prices have pumped up refineries’ profits, offering brighter prospects for one part of the global oil complex despite rising worries about Covid-19.
Oil prices have grown choppy in recent weeks since China, the world’s biggest commodities consumer, imposed restrictions to contain the Delta coronavirus variant. A decision by the Organization of the Petroleum Exporting Countries, Russia and the cartel’s other partners to pump more oil is also weighing on crude markets.
Prices for West Texas Intermediate, the main grade of U.S. crude, are down more than 10% from their 2021 high, trading at $65.46 a barrel.
The retreat is weighing on shares of energy companies including Exxon Mobil Corp. , but is a potential boon for refiners such as Marathon Petroleum Corp. Refiners stand to gain when gasoline and other products they produce fetch higher prices than the crude they purchase.
Refiners had already benefited from a summer surge in gasoline demand that pushed average pump prices above $3.15 a gallon. Investors haven’t rewarded their share prices, however, in part because of rising costs for meeting environmental rules.
