Analysis: U.S. Road Fuel Stocks Plummet to 18-Year Low


   
   VIENNA (DTN) -- Combined inventories of total motor gasoline and distillate 
fuel oil fell to their lowest level during the week of August 21, since 
September 2008, U.S. Energy Information Administration data released Wednesday 
(8/26) showed.

   Steep backwardation on the front-end of ULSD and RBOB futures forward 
curves, indicative of near-term supply tightness, continued to disincentivize 
storage, with high international demand for U.S. refined fuels diverting 
barrels onto the export market instead.

   Nationwide gasoline inventories fell by 2.5 million bbl to a nine-month low 
206.8 million bbl in the week ending August 21, down 7% year-on-year and 6% 
below the five-year seasonal average.

   Gasoline stocks have since mid-May followed typical seasonal patterns, first 
increasing along with refiner activity until the pickup in summer driving 
demand overtook the rise in domestic gasoline production.

   However, this followed months of inventories plummeting at a much faster 
pace than usual amid the sudden refined product supply shock caused by the 
closure of the Strait of Hormuz and the subsequent trough in global refining 
activity. U.S. gasoline inventories, hovering some 4.3% above the five-year 
seasonal average in early February, by mid-May found themselves 5.6% below it. 
Over these 15 weeks, the draw rate averaged 452,000 bpd, nearly twice as fast 
as the five-year average 229,000 bpd.

   Diesel inventories, in contrast, have over the past months registered 
counter-seasonal declines amid a persistently elevated export pace. Distillate 
fuel oil stocks last week fell 2.2 million bbl to 103.4 million bbl, down 9.5% 
year-on-year, and trailing the five-year seasonal average by 14.4%. Over the 
past four weeks, they shrank by 7.24 million bbl, or at a rate of 259,000 bpd.

   This coincided with exports running 400,000 bpd above year-ago levels at 
more than 1.8 million bpd.

   his rapid depletion in road fuel inventories came despite refiners 
processing the most crude oil since 2019 and high retail prices chipping away 
at domestic demand growth.

   Four-week average net inputs of crude oil were up nearly 200,000 bpd 
year-on-year, while refined product exports registered a 1.18 million bpd 
year-on-year increase.

    




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