Refiners are planning to spend the increasing jet fuel and diesel production instead of gasoline, traders and analysts said.
That is unusual and exemplifies the topsy-turvy nature of the global oil markets. Refining crude oil into diesel or jet fuel is currently more profitable than making gasoline due to an inventory squeeze in Europe following sanctions on Russia.
Normally, U.S. refiners ramp up gasoline output in the spring and summer to meet driving-season demand, while profitability for distillates like diesel or jet ebbs.
However, sanctions on Russian because of the war in Ukraine, pandemic-related refinery shutdowns that have reduced capacity, and an unexpected surge in natural gas prices have curtailed the volume of fuel refiners can produce, particularly in Europe, which relies on diesel as its primary motor fuel.
In the last two weeks, distillate exports have averaged more than 1.6 million barrels a day, the most since mid-2019, according to U.S. Energy Information Administration figures.
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