NEW YORK - Prices for petroleum products could drop below the cost of the crude oil from which they're made as demand declines and supplies rise.
Prices of petroleum distillates - diesel, jet fuel and heating oil - have already dropped below those for gasoline on the wholesale market, spelling bad news for refiners already hurting from squeezed margins.
Price pressure is expected to mount with supplies building as the recession affects consumption by truckers, airlines and the farm sector.
Until recently, refiners were maximizing output because distillates were selling at a premium to gasoline.
According to some estimates, distillate stocks are running 26 percent above five-year averages.
Highway diesel retail prices, which peaked at $4.70 a gallon last summer, have fallen to $2.221 on average, down 44 percent from a year ago, according to the U.S. Energy Information Administration.
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