USGC Prices Mixed in May, Gasoline Rises, Distillates Fall


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- U.S. Gulf Coast refined product prices posted mixed 
performance in May, with gasoline strengthening on seasonal demand, while 
distillates weakened as rising utilization boosted supply. Ongoing uncertainty 
surrounding also weighed on distillate bearish sentiment, limiting upside 
despite broader geopolitical risk.

   Gasoline prices in the region moved higher during May, diverging from diesel 
and jet fuel markets despite tightening product inventories.

   CBOB gasoline spot prices rose 23.50cts gallon to an average of $3.3118 
gallon in May, 70.19% higher than $1.9459 gallon reported in the same period 
last year.

   Gasoline inventories in the region fluctuated through May, posting one 
weekly build, two consecutive draws, and a final increase.

   According to the latest Energy Information Administration (EIA) inventory 
report, gasoline inventories stood at 81.1 million bbl in the week ended May 
22, below the 84.9 million bbl reported during the same period last year.

   ULSD spot prices remained under pressure and traded at an average of $3.8320 
gallon in May, down 3.37cts from April, on weak demand, and 89.77% above 
$2.0193 gallon a year earlier. 

   Distillate fuel oil inventories fell by 1.3 million bbl to 40.3 million bbl 
in the week ended May 22 and were below 43.8 million bbl reported during the 
same week last year, EIA data showed.

   Despite the decline, inventories remained above 38 million bbl -- the lowest 
level since the week ended March 17, 2023 -- recorded two weeks prior.

   USGC jet fuel traded at an average of $3.6013 gallon in May, down 44.63cts 
from April and 86.05% higher than $1.9357 gallon reported during the same 
period last year. The latest EIA inventory report showed jet fuel inventories 
increased by 1 million bbl to 15.4 million bbl in the week ended May 22 and 
were above the 13.4 million bbl reported during the same week last year.

   Gulf Coast refiners steadily increased operating rates throughout May, with 
refinery utilization rising from 95.9% at the beginning of the month to 98% in 
the latest reporting week. Crude oil inputs reached 9.595 million bpd as 
refiners ramped up production ahead of peak summer fuel demand.

   U.S. Gulf prices remained well above pre-war levels. From the start of the 
Iran war on February 28 to May 29, Gulf Coast gasoline spot prices climbed 43%, 
diesel prices rose 41% and jet fuel increased 33%, according to DTN data.

   The elevated price structure reflected persistent geopolitical risk premiums 
in global energy markets and robust international demand for Gulf Coast 
barrels. Heightened concerns over potential disruptions to trade flows through 
the Strait of Hormuz increased the importance of alternative supply sources, 
supporting export demand from Europe and Asia.

   Looking ahead to June, Gulf Coast refined product prices could remain under 
pressure from strong refinery production and seasonally rising fuel output.

   However, gasoline and distillate inventories remain below year-ago levels, 
while strong export demand and refinery utilization rates already near maximum 
operating rates could limit the market's ability to absorb unexpected supply 
disruptions. Any refinery outage, hurricane-related disruption or escalation of 
geopolitical tensions could quickly tighten balances and support prices despite 
the recent decline.




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