Analysis: U.S. Refining Rates Ease, Still At 5-Yr High, EIA says


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- U.S. refining rates have edged lower in the week ending 
January 16, the Energy Information Administration reported on Thursday (1/22). 
Whether this was the harbinger of a late start to maintenance season has yet to 
be determined, as refiners continued to operate at the fastest pace in five 
years.

   EIA's latest short-term energy outlook published last week contained a large 
upward revision to gasoline price expectations. U.S. wholesale gasoline is 
forecasted to average $2.01 gallon in the first quarter of 2026, which is  8.6% 
higher than in December's report, propelled by a 7% to 8% upward adjustment to 
crude spot averages.

   Incentivized by high crack spreads and refining margins, domestic refiners 
have been maximizing operations and delaying some non-essential maintenance 
work over the past few months. Crude oil inputs averaged 16.83 million bpd over 
the past four weeks, up 2% year-on-year and more than 9% above the five-year 
average. This came despite a 1% drop in refining capacity. Average utilization 
clocked in at 94.5%, compared to 90.9% in the comparable time span in 2025.

   Product cracks and crude oil prices have been diverging in the second half 
of 2025 amid a persistent tightness in middle distillates. In October, a 
European gasoil rally sent global diesel prices soaring, leading already 
elevated crack spreads to increase by more than 30% in a span of a few weeks. A 
similar pattern repeated throughout January: the 3:2:1 crack spread versus WTI, 
for instance, rocketed from $19.84 bbl to $25.41 bbl in the course of two weeks 
as NYMEX traded RBOB and ULSD futures rose to two-month highs.

   Surging crack spreads in January kept refining operations in the U.S. stayed 
elevated for longer than in previous years, when they would typically drop by 
more than 1 million bpd by the third week of the month. The comparatively small 
decline of 350,000 bpd in crude inputs reported for last week is another sign 
that refiners have been delaying maintenance as much as possible to profit from 
unusually high margins.




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