Friday, November 24, 2017

U.S. Gasoline Margins at 1-year Low

Posted by February 17, 2017

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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

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