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Gasoline stocks plunge amid stronger demand and driving boom: S&P

Gasoline prices 9 months high

Gasoline inventories reported an unexpected plunge in the week ending June 18, reported S&P Global; as demand for gasoline is reaching pre pandemic levels and gasoline imports are weakening, according to the latest data from the Energy Information Administration (EIA).

Firstly, total gasoline stocks in the U.S. fell 2.93 million barrels to 240.05 million barrels; which left inventories around 0.7% behind the five-year average; from a surplus of 0.4% seen during the week prior.

Secondly, the draw comes as total product supplied for gasoline climbed nearly 1% to a four-week-high of 9.44 million b/d; reaching highs last seen in February 2020, prior to the first wave of pandemic lockdowns.

Thirdly, according to data reviewed by S&P, Apple Mobility data shows US driving activity pushed to around 164%; starting from the January 2020 baseline, in the week ended June 18. This is in fact six percentage points from the week prior and a fresh record high for the data set.

On the other hand, total gasoline imports fell to 840,000 b/d, down 20% on the week and the lowest since the early April; while exports edge 60,000 b/d higher to 895,000 b/d. This data contrasts with the expectative of most U.S. energy analysts; they had expected gasoline stocks to have climbed last week amid an uptick in refinery utilization.

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Gasoline draws. Source: S&P Global

Gasoline draws concentrated on the U.S. Gulf Coast

Moreover, the American Petroleum Institute data released late June 22 showed a 956,000-barrel build in gasoline stocks in the week ended June 18; while analysts surveyed by S&P Global on June 21 saw stocks moving 1.3 million-barrels higher over the same period.

In addition, refinery runs showed a slight decline of 230,000 b/d to a total 16.11 million b/d; as utilization rates eased to 92.2% of total capacity, as S&P reports. However, and despite this decline in refinery runs, weekly adjusted gasoline production climbed more than 4% to 10.33 million b/d.

In fact, this would be the first time production has averaged above 10 million b/d since December 2019, and the highest since the week ended Sept. 6 of that year.

Finally, according to S&P, most of the draws are concentrated on the US Gulf Coast; here stocks declined 4.28 million barrels to 85.52 million barrels, while inventories climbed in most other regions.

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