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US Retail Fuel Margin Indicator Falls to Lowest Level Since 2021, TPH Says

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Higher crude oil and refining costs pushed TPH Energy's US retail margin indicator down 11 cents per gallon in May, even as gasoline prices continued to climb, TPH Energy said in a Monday note.

Pump prices increased 38 cents per gallon from April to $4.48 per gallon, the highest monthly average since July 2022, but higher refining margins and crude costs more than offset the increase, TPH said.

Refining margins rose 33 cents per gallon during the month, while crude costs increased 13 cents per gallon as the Iran conflict and seasonal trends lifted fuel input costs, according to the note.

The retail margin indicator fell 11 cents per gallon from the first quarter and reached its lowest level since the first quarter of 2021, TPH said.

The PADD 4 retail margin indicator increased 11 cents per gallon from the prior quarter as retail fuel prices in the region climbed $1.29 per gallon.

The PADD 2 retail margin indicator declined 17 cents per gallon from the prior quarter, while the PADD 1 indicator fell 15 cents per gallon and the PADD 5 indicator decreased 5 cents per gallon, according to the note.

Among companies covered by TPH, Par Pacific Holdings (PARR) has the greatest exposure to retail fuel margins through its service station operations in Hawaii and Washington, the report said.

The trend could also affect wholesale fuel marketing activities at Phillips 66 (PSX) and HF Sinclair (DINO), according to TPH.

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Distillate Demand Softens, Exports Strengthen in March DOE Data, TPH Says

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