Gasoline Margins at Record Highs

biz.yahoo.com Valero Energy Corporation Responds to Moody's Announcement Friday January 31, 2:30 pm ET

Currently, U.S. Gulf Coast gasoline margins are $7.20 per barrel, which is extraordinarily high for this time of year. And, based on the forward curve, the gasoline margin for the year is currently $5.20 per barrel, which is the highest gasoline margin in the last 15 years. It is also higher than the gasoline margins in 2002 and 2001 (which were $4.72 per barrel and $4.97 per barrel respectively) when Valero achieved record earnings.

"And, gasoline margins should remain strong, supported by tightening inventories, strong demand and the impact of the Venezuelan strike," said Greehey. "Gasoline inventories fell 3 million barrels last week and inventories are 4 million barrels lower than this same time last year. Meanwhile, gasoline production is down 500,000 barrels per day (BPD) since the first of the year. In addition, the strike in Venezuela has reduced gasoline imports into the U.S. by 55,000 BPD and has reduced exports to other countries (primarily Latin America) by another 175,000 BPD. This in turn has resulted in increased U.S. exports to Latin America. And, European barrels that would have typically been imported to the U.S. are now going to Latin America. At the same time, demand is up more than 4% over the last four weeks compared to the same period last year."