EIA: Oil and Petroleum Product Prices Soar in Q1

HOUSTON, TX (DTN) – Crude oil and petroleum prices rose steeply in the first quarter of the month, with Brent crude climbing from $61 bbl to $118 bbl in the same period, the largest price increase on an inflation-adjusted basis in data going back to 1988, the Energy Information Administration reported on Tuesday (4/7).

The hike was driven by military action in the Middle East on February 28 and the subsequent de facto closure of the Strait of Hormuz. In January and February, Brent prices steadily increased from $61 bbl to $72 bbl due to increasing risk of conflict in the Middle East, the EIA stated.

The price of Brent crude oil surpassed $100/b on March 12 and continued to generally increase throughout the month. After beginning the quarter at around $4 bbl, the Brent-WTI spread increased in March, peaking at $25 bbl on March 31 and averaging $11 bbl in the month, the highest in over five years.

Gasoline, distillate, and jet fuel spot prices increased rapidly in the first quarter following supply disruptions to Middle East exports of crude oil and petroleum products. On March 30, the U.S. average retail gasoline price of $3.99 gallon and U.S. average diesel price of $5.40 gallon were the highest in real terms in over two years.

Although gasoline prices have increased substantially, jet fuel and distillate prices have increased significantly more. Increasing U.S. exports to Europe, severe cold weather in the Northeast, strong trucking demand and declining renewable diesel output contributed to higher distillate demand or market tightness, the EIA said. 

The latest EIA’s Weekly Petroleum Status Report estimates that U.S. refinery inputs in the first quarter exceeded the five-year (2021–25) range, averaging close to 2018–20 levels. Refinery utilization was above the five-year range during the first quarter of this year, according to the report.  Distillate crack spreads, a measure of the refinery margins for distillate—at New York Harbor averaged $1.42 gallon in March, its highest monthly level since 2022 and well above the 2021–25 five-year average of 68cts gallon, the EIA stated.