US gasoline exports to increase

Since first moving into surplus in 2016, the US gasoline balance has risen steadily to approximately 350 000 bpd in 2018. As a result of a growing surplus, combined US exports of finished gasoline and motor gasoline blending components will rise to over 1 million bpd this year.

However, at the same time, the gasoline deficit in Latin America, which receives most US exports, will narrow slightly as regional gasoline output recovers. With total US gasoline exports expected to rise and the deficit in the US’ primary export market shrinking, exporters will look not only to capture greater market share in Latin America by replacing volumes from other exporters in Europe and Asia, but also look to increase exports to other markets.

But, as ESAI Energy Analyst Ian Page states: “Excess US gasoline volumes will face stiff competition in an oversupplied global market.” In 2019, the Asia-Pacific and FSU gasoline surpluses will both increase. Meanwhile the Middle East’s deficit will shrink dramatically from over 300 000 bpd to less than 150 000 bpd due to major supply growth in Saudi Arabia, Iran, and the UAE, where significant refining capacity is coming online. These developments, in combination with rising US exports, will exert bearish pressure on global gasoline markets and gasoline spreads to crude will weaken even further in 2019.

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