U.S. Gulf Coast Diesel Crack Spread Hits Record High Amid Rising Refining Premiums
The U.S. Gulf Coast diesel crack spread, which measures the refining premium refiners earn by converting crude oil into diesel fuel, surged above $100 a barrel in August for the first time on record. Typically trading between $15 and $30 under normal conditions, this sharp increase signals strong demand for refined products amid constrained supply or elevated production costs. Apollo Global’s chief economist Torsten Sløk warned that these historically high refining margins are contributing to core inflationary pressures in the economy. The widening gap reflects ongoing imbalances in energy markets and could prolong higher-than-expected price levels, particularly as diesel is a key input for transportation and industrial sectors across the U.S. The record premium underscores how supply chain bottlenecks or production constraints at refineries are amplifying inflationary risks beyond just crude oil prices.
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