Week in Review – Crude Slips Below $60 While California Gasoline Prices Spike on Refinery Cuts

Crude oil prices are poised for another weekly decline, driven by bearish sentiment stemming from persistent oversupply concerns, shifting refinery operations, and mixed global demand signals. After three days of losses earlier in the week, Brent crude futures edged up 43 cents on Friday to $63 per barrel, while West Texas Intermediate (WTI) rose 47 cents to $59. Despite the late-week recovery, both benchmarks remain down roughly 1.5% for the week as global inventories continue to climb and OPEC+ prepares for modest output increases.

Rising global production, coupled with weakening U.S. refining activity, has pressured market sentiment. U.S. crude stocks posted a surprise 5.2 million barrel build, driven by higher imports and lower refinery utilization during the fall maintenance season. Gasoline and distillate inventories both fell, with distillate demand ticking up to 3.71 Mbpd. While headlines emphasize the bearish implications of continued crude builds, distillate stocks remain 4.25 million barrels below year-ago levels, leaving the market sensitive to colder weather or an unexpected refinery outage that could tighten supply and lift prices.

Geopolitically, markets took note of President Trump's remarks that Iran had inquired about the removal of sanctions, with the President stating he was "open to hearing that." The potential for renewed diplomatic dialogue, along with Trump's planned meeting with Hungarian Prime Minister Viktor Orbán to discuss Hungary's reliance on Russian oil, added intrigue to the week's market developments. Meanwhile, China continued to underpin global demand, with crude imports up 8.2% year-over-year in October as refiners operated at their highest utilization levels of 2025. However, Asian floating storage hit a three-year high of 53 million barrels, reflecting trade bottlenecks following Western sanctions on Russian crude flows to China and India.

In the U.S., regional refinery dynamics are shaping product markets. California refinery production of reformulated gasoline (RFG) fell for a second consecutive week, dropping to a record low of 4.565 million barrels as major refineries moved toward closure. Phillips 66 halted oil processing at its Los Angeles facility in October, while Valero plans to shut its Benicia refinery by spring. Despite the output decline, California's RFG stocks rose slightly to 5.25 million barrels, higher than last year's level.

Retail gasoline prices across Southern California increased sharply due to the refinery setbacks. According to AAA, statewide prices jumped 12 cents to $4.69 per gallon, with Los Angeles and Orange County seeing increases of more than 20 cents. The Los Angeles-Long Beach area now averages $4.85 per gallon. AAA cited supply constraints tied to refinery closures and maintenance as the primary drivers, but noted that imported supplies from Asia and Canada could help ease prices in the coming weeks.

Prices in Review

Crude prices opened the week at $61.40 on Monday and trended steadily lower as bearish supply sentiment weighed on markets. Prices slipped to $61.03 on Tuesday and $60.43 on Wednesday, marking midweek losses from rising global inventories and soft refining demand. The decline continued on Thursday, with crude opening at $59.68, before decreasing slightly to $59.65 on Friday. Overall, crude prices fell $1.75 per barrel, or 2.85%, for the week.

Diesel prices showed increases this week, opening at $2.4009 on Monday and edging slightly higher through midweek, reaching $2.4438 on Wednesday before dipping to $2.4292 on Thursday. By Friday, diesel rallied to $2.5008, its highest level of the week, supported by tightening distillate inventories and seasonal demand expectations. Overall, diesel prices increased $0.0999 per gallon, or 4.16%, for the week.

Gasoline prices experienced moderate gains this week, supported by regional refinery disruptions and stronger retail demand. The market opened at $1.9008 on Monday and inched higher through midweek, reaching $1.9213 on Wednesday before dipping slightly to $1.9132 on Thursday. By Friday, gasoline prices climbed to $1.9588, marking the week's high. Overall, gasoline rose $0.0580 per gallon, or 3.05%, for the week.