Sources of Product Price Pressures
Tight world petroleum markets translate to high
crude oil prices and higher product cracks
Imports likely to be more expensive due to U.S.
product specification changes & high world
Increased potential of U.S. price volatility from:
Tight world markets (low inventories),
Increasing number of fuels,
High U.S. capacity utilization
But higher product margins near term may
encourage more U.S. refinery capacity expansion
In summary, we can expect price pressure not only from crude oil prices, but also from higher cost imports and even increased potential for price volatility.
If there is a silver lining to this picture, it is that increased margins should eventually encourage more U.S. refining capacity expansion in the future.