The amount of money a U.S. refiner can make producing gasoline in the United States has improved in recent weeks relative to diesel thanks to gasoline production cuts and a heavy downturn in diesel demand from the U.S. trucking industry as the economic crisis deepens. Diesel has been the most profitable fuel a producer can make since July 2007 — an unusual occurrence for the less difficult-to-make fuel largely tied to high freight activity and demand from the under resourced global electricity sector.
The early evidence of a reversal in the profitability relationship is already having an impact on what consumers are paying at the pumps: diesel’s price premium to gasoline has dropped from 64 cents a gallon to 43 cents a gallon over the past four weeks, according to auto and travel group AAA.
In the above graph, the top line indicates the gross profit margin a U.S. refiner can achieve producing a barrel of distillate fuel, while the bottom line indicates the margin for producing gasoline.