US gasoline inventories, consumption, production, and exports all increased over the past year
US gasoline inventories reached 226.1 million barrels, a 9.3-million-barrel increase from the same time last year and the highest level for this time of year since at least 1990. Gasoline inventories have been elevated all year despite strong domestic consumption and exports. High gasoline crack spreads, the difference in value between a gallon of gasoline and a gallon of crude oil, have encouraged continued high utilization of US refining capacity. The fall refinery maintenance season had less down-time compared with last year, helping to further drive high levels of production and inventory.
Consumption of gasoline in September, the most recent monthly data point, set a record high for the month at 9.5 million barrels per day (bpd), 203,000 bpd higher than the previous September record set in 2015. Weekly product supplied data indicate that strong demand for gasoline continued into the fall, with the second week in November setting a new high of 9.4 million bpd of finished motor gasoline product supplied compared with 9.1 million bpd at the same time last year.
Crack spreads in the US have remained relatively high despite a typical seasonal decrease. The New York Reformulated Blendstock for Oxygenate Blending (RBOB) to Brent crack spread dropped from 47 cents per gallon on November 1 to 25 cents per gallon on November 18. While rapid, this decline is common around the November timeframe and, relative to recent years, crack spreads remain high for the season, providing incentive for refineries to run.
The average New York RBOB to Brent crack spread through mid-November 2016, 33 cents per gallon, is the highest dating back to at least 2009 and is greater than spreads for all of November in 2015 and 2014 by 1/2 cent and 10 cents, respectively.
US refinery and blender net production of finished motor gasoline was 10.3 million bpd in September, 303,000 bpd higher than the previous September. Refinery output remains strong even in the late fall; the first two weeks of November had a net output of 10.5 million bpd and 10.2 million bpd, respectively, compared with output of 9.7 million bpd and 9.6 million bpd for the same weeks last year.
Gasoline prices are closely linked to crude oil prices, with both relatively low compared with recent historical levels. The Cushing, Oklahoma, West Texas Intermediate (WTI) spot price on Nov. 21 was $47.48 per barrel (b), above the November 2015 average of $42.44/b. However, this was well below the previous three-year (2013-2015) November average of $70.70/b. US gasoline prices follow a similar pattern; the price for US regular gasoline was $2.15 per gallon as of November 28, up 10 cents from the same time last year. However, 2016 prices for US regular gasoline are still relatively low compared with the November average of $2.77 per gallon for the previous three years.
In addition to strong domestic gasoline demand, exports have also been high. September 2016 exports were 564,000 bpd, up 208,000 bpd over the year-ago level. The Gulf Coast (Petroleum Administration for Defense District (PADD) 3), accounted for 92% of total US gasoline exports in September of this year. The bulk of US exports go to Mexico, which alone accounted for 60% of total US motor gasoline exports in September.
Beginning in late August, 2016, EIA’s Weekly Petroleum Status Report began publishing weekly petroleum export estimates based on near-real-time export data provided by US Customs and Border Protection. US gasoline exports have increased rapidly between September and early November. While weekly gasoline exports have declined sharply over the past several weeks, they remain well above monthly export levels since 2010.
Comments