U.S. Gasoline Margins at 1-year Low

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Posted by Joseph Keefe

U.S. gasoline margins fell by more than 11 percent
early Friday morning, hitting one-year lows on fears of
oversupply and weakening demand, traders said.

The U.S. gasoline crack spread, a key indicator of refining
margins, fell 11.2 percent to a low of $9.50 cents a gallon in
early trading before slightly paring losses.

U.S. gasoline demand growth is going to be lackluster this year
in large part because the United States reached full employment
last year, Harry Tchilinguirian, BNP Paribas' global head of
commodity markets strategy, told the Reuters Global Oil Forum on
Friday.

"Given that we see U.S. refiners still producing at record levels
this summer, and that the demand backdrop is lackluster in terms
of growth, we would stay away from buying summer gasoline
cracks," he said.

Gasoline stocks rose by 2.8 million barrels last week, pushing
inventories of the fuel to a record 259 million barrels,
according to the latest data from the U.S. Energy Information
Administration. U.S. East Coast gasoline inventories have been at
record levels for weeks.

Inventories of gasoline have surged 10 percent since the end of
2016, EIA data showed.

Overall demand for gasoline in the last four weeks was down 5.3
percent year-on-year at 8.43 million barrels per day (bpd).

Reporting by Jarrett Renshaw

Feb 17, 2017

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