Gasoline futures prices were seeing another day of strong losses Wednesday after Energy Information Administration data released in the morning showed an increase in inventories and continued lackluster demand.
Crude oil and ULSD futures were rising, even as EIA reported an increase in U.S. distillate supplies.
Gasoline futures have been under pressure for more than a week and Wednesday is seeing a continuation of that trend. The June NYMEX RBOB contract was down 2.24cts to $2.5210/gal at about 11:30 a.m. ET, while July prices were 1.82cts lower to $2.5001/gal.
While ULSD contracts were rising, the gains were under 1ct, with the front-month contract moving 0.82ct higher to $2.4738/gal while July prices inched up 0.8ct to $2.487/gal.
Crude contracts have been rising through the trading session, though gains heading into the afternoon were relatively muted, with the June contract for West Texas Intermediate crude up 47cts to $78.85/bbl while July prices added 41cts to $78.47/gal. Brent crude increases were even slighter, with July Brent advancing 36cts to $83.52/bbl and August prices 28cts higher to $83/bbl.
Crude prices are being supported by the latest EIA data, which showed crude inventories fell by 1.4 million bbl in the week ending Friday. Crude stocks are about 3% below seasonal averages.
The decline in crude stockpiles came as U.S. refinery utilization rose by one percentage point to 88.5%.
The increased refinery output helped send gasoline inventories higher by 900,000 bbl last week, while distillate supplies rose 600,000 bbl. Gasoline supplies remain 2% below seasonal averages while distillate supplies are 7% lower than the seasonal five-year average.
EIA's measure of implied gasoline demand showed an increase last week, rising by about 180,000 b/d to nearly 8.8 million b/d. Nonetheless, gasoline demand remained about 4% below levels seen at the same time last year, EIA reported.
OPIS DemandPro data, which is based on weekly surveys of more than 30,000 retailers nationwide, has shown a year-to-year lag in demand for most weeks so far this year, with OPIS data showing national demand year to date running about 5.6% below the same period in 2023.
The recent weakness in gasoline futures prices is proving a boon for U.S. retailers, as gross rack-to-retail margins for gasoline are at some of the highest levels seen so far this year. U.S. gasoline margins were averaging 45.2cts/gal Wednesday afternoon, according to OPIS DemandPro data. That's an increase of 6cts from a week ago and up more than 10cts from last month.
Diesel margins are averaging 67.7cts/gal, an increase of 0.2cts from last week but up 12.2cts over the last month.
--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
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05-08-24 1245ET
