-Oil prices have fallen 60% since August 2014, but gasoline prices in the U.S. have only decreased by 25% in that time. The Wall Street Journal explains the key reason for the disparity — production costs associated with environmental regulations. Rules that mandate ethanol blending, sulfur removal and reformulation necessitate premiums in the price of gas that compensate refiners for their compliance costs. The cost of crude oil accounts for 35% of the price of gasoline nowadays — that’s down from 45% in the mid-‘80s and ‘90s.
-The California Air Resources Board is set to restore a program that mandates a 10% reduction in carbon emissions on fuel sold in the state by 2020. Via the Associated Press, the program withstood a challenge by industry groups, who argued it would boost gasoline prices statewide. The board claims the program will only cost consumers $12 to $48 per year by 2020. The Western States Petroleum Association says there is not enough low-carbon biofuels to allow fuel producers to meet the standards.
-Refiners cut their operating rates by the most in eight months last week, according to the Energy Information Administration. Via Bloomberg, oil prices fell on Wednesday after refinery utilization decreased by 2.2 percentage points last week. The price of West Texas Intermediate later ticked back up when the dollar lost value against other currencies. Refiners are slowing down operations as the summer driving season wanes and fall maintenance activity begins.
-Many of the small, independent fracking companies that swarmed the market during the shale boom are struggling to survive amid low oil prices, the Wall Street Journal reports. IHS Energy said at least five hydraulic fracturing firms have gone bankrupt, halted operations or closed their doors. Large multinational service companies such as Schlumberger and Halliburton have suffered as well, laying off 55,000 people worldwide and cutting their prices — the latter of which has driven smaller players out of the market.
-BASF announced earlier this week Klaus Welch would take over as president of Engineering & Maintenance upon the retirement of Volker Knabe. Beate Ehle, who currently serves as president of marketing and business development for North America, will succeed Ulrich von Deessen as president of Environmental, Health & Safety after von Deessen retires in February.
