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Gasoline demand in the U.S. shows signs of further softening just three weeks into the peak driving season, with near-record prices likely encouraging people to stay closer to home.
The four-week moving average of gasoline supplied — the best gauge for demand — fell below 9 million barrels a day, or about 600,000 barrels less than typical seasonal levels, according to data from the U.S. Energy Information Administration.
Trailing demand likely followed high pump prices, which reached a record $5.016 a gallon on June 13 and have fallen only slightly since. Expensive fuel is making summer road trips less attractive and contributing to decades-high inflation rates that are making daily life more costly. . President Joe Biden’s administration has tapped a number of tools trying to ease pump costs, including releasing crude from U.S. emergency reserves.
Below-average gasoline demand may be a warning that prices are starting to deter consumers, said Rebecca Babin, senior trader at CIBC Private Wealth Management. “But demand-growth slowdown is not the same thing as demand destruction,” she said.
Gasoline futures trading in New York lost about 16 cents a gallon since the EIA data release June 29, pushing the crack spread — a measure of gasoline’s relative strength to crude — below $44 a barrel, the lowest in about two weeks.
Supply fundamentals remain tight. U.S. refiners are operating at the highest rate since September 2019 but still can’t materially bulk up inventories, which are at their lowest since 2015, even after a weekly gain of 2.65 million barrels.
— With assistance from Julia Fanzeres.
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