WMT - Prepare for $6.00 prices at the pump says JP Morgan

National average gasoline prices hit $4.57 Wednesday, a record, but JP Morgan's head of commodity research says consumers should prepare for gasoline prices above $6.00 this summer. Prices have already surpassed $6.00 per gallon in California, and are over $7.00 per gallon in parts of the state. However, elevated oil prices (USO) are not the only culprit; dramatic reductions in global oil refining capacity, paired with reduced Russian and Chinese exports, has already resulted in shortages of oil products like jet and diesel fuel. In recent years, ~3mb/d of refining capacity has been shuttered or converted to bio-fuel production, according to JP Morgan estimates; the impact on fuel prices has thus far been negligeable, as pandemic-related demand weakness masked underlying supply reductions. However, with oil demand reaching pre-pandemic levels in 2022, refiners are scrambling to meet demand; Russian diesel export reductions saw distillate margins spike in March, but as refiners

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Prepare for $6.00 prices at the pump, says JP Morgan