On a comparative basis, the fourth quarter 2011 presented a very challenging refining environment. Crude differentials narrowed between West Texas Intermediate (“WTI”) and Light Louisiana Sweet (“LLS”) from $25 per barrel in October to $10 per barrel in December. Asphalt margins were also negatively affected by a decline in prices in the Company's core markets. However, fourth quarter 2012 saw more stability in crude price differentials. In addition, results continued to benefit from increased access to cost-advantaged domestic crude sources, such as WTI Midland crude, which traded at a quarterly average of $3.55 per barrel below the WTI Cushing benchmark during the fourth quarter of 2012. Also, a lighter crude slate at El Dorado reduced asphalt production and allowed better inventory management during a seasonally slow demand period for asphalt. This allowed for fourth quarter 2012 to show a significant improvement over the prior year period.
Tyler, Texas Refinery
Total throughputs at the Tyler refinery were 66,581 barrels per day in the fourth quarter 2012, versus 63,722 barrels per day in the fourth quarter 2011. Total sales volumes were 67,617 barrels per day in the fourth quarter 2012, compared to 63,211 barrels per day in the fourth quarter 2011.
Direct operating expense was $29.0 million, or $4.66 per barrel sold, in the fourth quarter 2012, versus $24.3 million, or $4.18 per barrel sold, in the fourth quarter 2011. This increase was mostly attributable to higher maintenance related expenses and year-end insurance expense adjustments. On a sequential basis, this compares to operating cost of $28.2 million, or $4.91 per barrel in the third quarter 2012. .Tyler's refining margin was $19.57 per barrel sold in the fourth quarter 2012, compared to $11.88 per barrel sold for the same quarter last year. This increase was primarily due to more stable crude price differentials between WTI and LLS, as well as a wider WTI Midland discount and a higher Gulf Coast 5-3-2 crack spread as compared to fourth quarter 2011.
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