In the dynamic landscape of petroleum markets, recent trends reflect a mix of opportunities and challenges for small business owners engaged in the energy sector. According to the U.S. Energy Information Administration’s latest analysis of the first quarter of 2025, several factors influenced crude oil prices, refinery margins, and compliance credit prices—key metrics that small businesses must track to make informed operational decisions.
Crude oil prices began the year on a high note, reaching $82 per barrel on January 15, but saw a decline, stabilizing at $75 per barrel by March 31. This drop was attributed to a combination of rising global consumption outpacing production, alongside fostering concerns about economic growth that weighed heavily on future demand. Notably, U.S. GDP decreased by 0.3% during the same period—marking the first economic contraction since early 2022. For small business owners, this highlights the necessity to adapt to fluctuating oil prices, which can impact everything from supply chain costs to pricing strategies.
Shifting focus to refinery margins, small businesses benefiting from petroleum products experienced a mixed bag. Initially, U.S. refinery utilization stood at 93%, but by the quarter’s end, it had decreased to 86%. While the Midwest showcased high efficacy, the West and East Coast saw notable drops, partly attributed to refinery maintenance and unexpected outages. The variation in refinery margins is crucial for businesses relying on gasoline or distillate fuel oil, as they may face higher costs and constraints on supply.
For small businesses engaged in refining or those reliant on oil, understanding crack spreads—the difference between crude oil prices and refined products—is essential. In February, gasoline crack spreads at New York Harbor were about 35 cents per gallon, slightly above previous averages, while by March, those figures plummeted to below five-year averages. The volatility in these spreads may indicate opportunities for savvy business owners to strategize inventory management and purchasing.
Moreover, the biofuel landscape has seen a significant rise in compliance credit prices for renewable fuels such as biomass-based diesel and ethanol. Rising feedstock costs and diminished production levels propelled RIN prices to their highest since 2023, with credits trading at premiums due to lower supply levels. These developments underscore the importance of staying ahead of regulatory requirements and compliance costs, especially as biofuel mandates continue to evolve.
As the first quarter wrapped up, natural gas plant liquids (NGPL) prices experienced a notable upswing. The composite price rose by 10% to an average of $8.10 per million British thermal units, driven largely by rising ethane and propane prices. For any small business involved in the sale or utilization of NGPL, this upward trend may provide insights into hedging strategies or plans to diversify product offerings based on market dynamics.
However, challenges remain for small business owners. Seasonal maintenance of refineries can lead to downtime, affecting supply and increasing prices. Those in the refining space must prepare for such events, ensuring contingency plans are in place to mitigate losses. Additionally, the lingering uncertainty surrounding potential economic downturns necessitates a proactive approach to financial management and operational resilience.
As crude oil markets continue to fluctuate, small business owners must remain vigilant and responsive. Staying informed, leveraging data analytics to track key metrics, and adjusting strategies accordingly will empower businesses to thrive, even in uncertain conditions.
The implications of these trends go beyond mere numbers, affecting how small businesses approach pricing, budgeting, and strategic growth initiatives. For further details on these trends, visit the original report from the U.S. Energy Information Administration here.
Image Via Envato: Bluesandisland
