EIA: Increasing US gasoline inventories are reducing gasoline prices

The US Energy Information Administration (EIA) reports that increasing gasoline inventories, relatively weak demand, and oil prices below recent peaks are all contributing to falling gasoline prices.

Increasing gasoline inventories, subdued demand

Increasing gasoline inventories have put downward pressure on gasoline prices. On 19 April, US gasoline inventories were 226.7 million bbl, 8.5 million bbl less than the previous five-year (2019 - 23) average. Between 19 April and 21 June (the most recent week available), US gasoline inventories increased by 7.1 million bbl to 233.9 million bbl, essentially equal to the previous five-year average. The increase has been driven by unseasonably large inventory growth in the East Coast, which increased by 4.1 million bbl over the same period. The large inventory growth in the East Coast offset seasonal gasoline inventory declines in the Midwest and Rocky Mountains.

Inventories on the East Coast increased, in part, because of more gasoline imports, which follow seasonal trends. Historically, more than 80% of US imports of gasoline enter through the East Coast. Gasoline imports into the East Coast hit a 2024 low of 381 000 bpd the week of 5 April but increased after that and averaged 630 000 bpd the week of 21 June, a 65% increase. Data from Vortexa Analytics indicate that most of this increase is driven by increased imports of gasoline from Europe.

Inventories are increasing because of higher refinery runs at the same time that demand for gasoline has been subdued. US gross refinery inputs using a four-week rolling average increased from 14.9 million bpd the week of 23 February — the lowest in 2024 to date — to 17.4 million bpd the week of 14 June. Runs declined slightly the week of 21 June, averaging 17.3 million bpd, but remained more than runs at the same time in 2022 and 2023. On the East Coast, refinery runs have been above 2022 and 2023 for most of the year.

Crude oil prices

Although they have increased through most of June 2024, crude oil prices, the largest contributor to the price of gasoline, generally declined between early April and early June. The price of Dated Brent crude oil, an international benchmark, reached a 2024 high of US$93/bbl on 12 April before falling to US$76/bbl on 5 June. Crude oil prices in early April were driven by heightened geopolitical risk related to ships transiting the Red Sea and general elevated tensions in the Middle East, along with an OPEC+ announcement to extend production cuts. Since then, however, oil markets have generally adapted to longer shipping routes that avoid the Red Sea, and OPEC announced potential increases in crude oil supply. Crude oil prices remain below the highs seen in April, and as of 1 July, the price of Dated Brent was US$88/bbl.

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