for gasoline and diesel dipped below average despite shrinking refinery capacity on the West Coast . Crack spreads are the difference between refined product prices and an equivalent volume of crude oil. We use them as a measure to estimate refinery margins based on commodity market conditions. The decline in West Coast crack spreads stems from growing regional gasoline inventories and the increasing use of biofuels in place of conventional, petroleum-based diesel fuels in California.
Despite the long-term reductions in West Coast refining capacity, regional gasoline crack spreads have fallen since the end of April as refinery production increased after a period of seasonal maintenance and as motor gasoline consumption decreased, adding to inventories. West Coast gasoline inventories have generally been increasing on a weekly basis since the end of April, according to our. West Coast motor gasoline consumption decreased 2% year over year in the first quarter of 2024.