For the week ended June 12, the demand for gasoline in the US inched down due to the surge of new coronavirus cases in some states. The hit in demand recovery has undercut refiners’ ramping up of fuel production.
On Wednesday, the US Energy Information Administration (EIA) said that the country’s gasoline consumption went down by 30,000 bpd to 7.9 million bpd last week.
The fall just occurred on the fifth consecutive weeks of refining rate increases, as last week the rate touched the highest since early April at 73.8% of capacity.
However, in that period, refiners cut output, driving the gasoline inventories to slip to 257 million barrels, compared to 263 million in April. Still, the reading was way beyond the 233.2 million barrels of May 2019.
On Thursday, margins on gasoline have improved to USD13.39/barrel, despite still being the lowest seasonally since 2010, according to Refinitiv Eikon.
Looking ahead, economist Matt Smith of Clipper Data expected that the lower demand elsewhere would still hurt US gasoline demand, leading to oversupply in the market.
Mexico, US top gasoline market, imported half the June 2019 number to 183,000 bpd. Diesel exports to the country were also cut by half.
“Refinery runs are going to have to remain in check as we move through the summer,” Smith said.
