We are stepping into the peak summer time driving season and gasoline demand has been hitting all-time highs. You would possibly assume that inventories would be drawing down and that the U.S. would need to import more gasoline and gasoline mixing parts. However not so. U.S. refineries are cranking out the merchandise. Gasoline stocks are up 10% from a year ago 5 million barrels (MMbbl) higher than the top of the five-year range—and final week gasoline inventories made a contra-seasonal transfer upward, growing by 1.4 MMbbl. Web exports for the primary quarter were up virtually 5 occasions the same interval in 2015. But what does all this imply for refined product markets in general, and gasoline balances in particular? As we speak, we study the state of U.S. petroleum product markets.
The upswing in U.S. gasoline demand is nothing new. RBN blogged about it this time final yr in King of the Highway (Once more) and lined issues associated to delivering gasoline, diesel and jet gas to Northeast markets a number of weeks again in Move It on Over. Within the Energy Data Administration’s (EIA) June 2016 Quick-Time period Energy Outlook, gasoline consumption this summer time was projected to average 9.5 MMb/d, a solid 1.9% larger than the summer season of 2015, which was a strong demand season itself. What actually stands out, although, is that even with excessive home demand for gasoline, web U.S. export volumes remain spectacular. Determine 1 exhibits EIA web exports of gasoline (exports less imports of finished motor gasoline and motor gasoline mixing elements) and net exports of distillates (exports much less imports of distillate gasoline oil and kerosene-sort jet gas). The graph on the left is the overall of internet gasoline and distillate exports, showing the massive shift of the U.S. from a net importer of about 1.5 MMb/d in 2006 to a internet exporter of about 1.2 MMb/d over the past six months. The graph on the appropriate in Figure 1 focuses on the 2012-16 timeframe and splits net exports into gasoline (inexperienced line) and distillates (brown line). Both are nonetheless trending higher, however the large information is gasoline, which has moved effectively into the net export category since late 2015 (purple oval).