Diesel Squeeze Nobody Hedged: 4 Refiners Just Logged Their 6th Straight Week of Gains
Key takeaways
- A persistent diesel squeeze is propelling U.S. refiners to record profits and share‑price gains, with margins staying above $100 a barrel and fueling robust shareholder returns.
- MPC up 7.1% to $424.07
- DINO up 7.5% to $115.95
- VLO up 5.8% to $413.09
What happened
Four U.S. refiners—Marathon Petroleum Corp. (MPC), HF Sinclair Corp., Valero Energy Corp., and Phillips 66 —each closed a sixth straight week of gains, with MPC up 7.1% to $424.07, DINO up 7.5% to $115.95, VLO up 5.8% to $413.09, and PSX up 5.4% to $273.42. The gains reflect a sustained diesel squeeze, as the ultra‑low sulfur diesel crack spread has stayed above $100 a barrel, the highest since the 2022 crisis. A recent drone strike on Saudi Arabia’s East‑West pipeline pushed U.S. diesel…
Why it matters
The diesel squeeze is a rare commodity‑price event that directly boosts refinery profitability. With crude prices near $28 a barrel—well below 2022 highs—refiners are capturing the entire spread between crude and diesel, turning a low‑cost input into a high‑margin product. Sustained high margins can lead to increased…
Short-term and longer-term
Short-term. Short‑term traders should watch the diesel price trend and any further supply shocks, as they directly impact the crack spread.
Longer-term. Long‑term investors should note that the diesel squeeze is a temporary supply‑driven event, but the sustained high margins have already translated into substantial shareholder returns.