The Crude Reality and West Coast Market Update

March WTI crude oil went up $2 and was last traded back over $42 a barrel this morning. There has been no more downward talk after last Friday's skirting with the $40 a barrel threshold. That was due mainly to large long March position being forced to roll into April contracts at the lower number. The Nigerian rebels have called off their truce over the weekend. This has once again threatened that country's continuing to ship their most wanted sweet crude oil to the U.S.
On the West Coast the wholesale spot gasoline prices has been a strong performer for the last month but is now started to show some weakness down 5 cents per gallon this morning. But don't get your hopes up that pump prices will be coming back down any time soon. The average price in the U.S. is still headed to over $2 per gallon in the next week due to overall production cuts by the refineries. Diesel meanwhile is showing some strength with a 2 cent bump.

The price of gasoline is already at $2.20 per gallon on the West Coast per the AAA fuelgauge report. The break even price for unleaded regular gasoline at the spot market unbranded rack has been over $2.25 per gallon for the last week and that is where the overall price should be by the end of this week.

Crack spreads at the U.S. West Coast refineries are an amazing $35 a barrel today. There is a differential of 25 cents over the the branded by the unbranded wholesale gasoline price. That is the main cause for the strengthening of the refinery crack spreads as they do not have any surplus gasoline to sell in the spot market. So remember to keep your car's gas tank gauge on high.