Welcome to The Distillate! Petroleum industry news for informed decisions for Tuesday May 6th, 2025. A product of Standard Petroleum Logistics (an actual fuel distributor). Paid subscribers get access to news that is only available to industry insiders. Want to know what’s really going on with in the oil industry and save money? You can do that, with a subscription to The Distillate.
Markets are on the upswing this morning as traders view yesterday’s drop as a buying opportunity.
Rig count down. As the price of WTI crude continues to slide rigs continue to shut down. Friday’s report showed another 11 North American rigs (eight in Canada and three in the U.S.) have stopped pumping. Despite reports of a “resilient consumer” forecasts remain bearish on oil with increased production expected from OPEC+ members and new barrels coming online in places like Norway, Peru and in the waters around the world.
Beware E15. The Environmental Protection Agency has granted an emergency waiver which allows for the sale of gasoline blended with up to 15% ethanol in all markets through the summer. The effort is to avoid varying fuel specifications from state to state, they say, but fuel variations already vary. We’re not sure what emergency was cause for this waiver, but we do know it was requested by seven midwestern (read: cornbelt) governors. Once touted as an environmentally friendly alternative to gasoline, ethanol’s “green” status has since been revoked as original research did not consider the damage done by large scale farming or the reduction in fuel economy.
Beware E15, part 2. Higher-blend gasoline must be marked as such, but marketers do an excellent job masking it. Often labeled Flex 88 or just Unleaded 88 it carries a much lower price per gallon for the consumer and a much higher profit margin for the retailer. The only issue is the massive reduction in fuel economy. You’ll save pennies on the gallon, but you’ll use a lot more gallons. Additionally, ethanol burns hotter than gasoline and can be taxing on engines and components. It is hydrophilic and will easily remove itself from the gasoline to bind with water.
A new target for skimmers: EBT cards. Gas stations are the #1 target of card skimmer scams due to the large amount of exterior, unattended card readers. The chips that were added to most credit cards a few years back made it harder to grab card data, but Electronic Benefit Transfer cards do not have such chips, making them an easy target. Thieves have been staking out low-income neighborhoods (where the cards are prevalent) and installing skimmers, grabbing data and draining accounts of critical funds. For C-Store operators, the Secret Service offers instructions for how to locate a skimmer on your equipment and guidance for reporting them. Card readers can be nearly invisible, made to slide over and completely match the original point of sale equipment.
Major jet pipeline down. Reports have wafted our way about an outage in the pipeline that feeds the Craney Island Fuel Terminal in Portsmouth, VA. Though there are no official reports, trucking assets from NC to NJ have been called to aid the Defense Logistics Agency – at least three dozen truckloads a day of jet fuel are getting moved during this outage. The pipeline is an extension of the Colonial Pipeline from Hampton Roads and supports military operations.
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