U.S. is making most fuel since 2019, but it’s still not enough

The U.S. is currently producing the most fuel since 2019, with refiners processing 17 million barrels of crude daily, the highest weekly average since September 2019. However, despite this increased production, fuel supplies remain tight due to global disruptions and strong export demand. U.S. crude inventories have fallen by over 7 million barrels, and gasoline and distillate stockpiles remain seasonally low, signaling continued supply concerns. Refineries are operating at a pace not seen since before the COVID-19 pandemic, but soaring prices are unlikely to be reined in soon. The Midwest has seen a record amount of crude processed in a week, and global fuel supplies are perilously tight, encouraging refiners to maximize production and capture strong profit margins. U.S. consumers are unlikely to see relief at the pump soon, with gasoline and diesel futures rising and U.S. fuel markets remaining tight. The impacts of the increased production are visible in U.S. commercial crude stockpiles, which have dipped to their lowest since 2018. Stockpiles at Cushing, Oklahoma, the U.S.’s commercial crude storage hub, are below 20 million barrels, a level considered the operational minimum. The premium for buying a barrel of crude oil for delivery in September versus October has risen, indicating market concerns about the availability of immediate supply. Global crude oil markets have proven resilient, but the picture for fuels is fragile, with Russia banning exports of gasoline and countries scrambling for fuel supplies, sending U.S. exports surging. Gasoline exports remain around seasonal averages, and exports of distillate fuels like diesel have risen to their second-highest weekly level on record. U.S. stockpiles are at their lowest for this time of year since 2000, and profit margins for diesel in the U.S. are near record highs.