If you’re in the oil business these days, it’s good to be a refiner. Refineries are benefiting from the declining crude oil prices, turning it into higher priced products such as gasoline and jet fuel while low prices at the pump drive up consumer demand for fuel.
U.S. refineries are busier than ever, running at well above 90% of capacity. Refining capacity has reached approximately 17.8 million barrels a day, an increase of 400,000 barrels a day from just two years ago.
“When we think of refining margins, for the most part refiners are relatively immune from the absolute price of oil and more a function of refined product demand than anything else,” said Justin Jenkins, an analyst for Raymond James. “When oil prices came down as much as they did, they really spurred a consumer demand response and … surprised a lot of people.”
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