Spring is here and higher gasoline prices are on the way!

By: George Butler / March 22, 2018

The east coast attainment areas (Major Cities and Surrounding Counties) are emptying out of winter grade Reid Vapor Pressure (RVP) gasoline and lower RVP Summer grade gasoline is already in the major pipelines. 

This time begins a very sloppy price landscape with INDEX prices reflecting lower RVP gasolines at higher prices while suppliers are offering discounts to move out winter gas. car-driving.jpg

Distributors will truck great distances to continue to pick up winter grade material and back haul into markets reflecting summer grade prices. The current price spreads are .10 to .15 higher depending on the market you are in. 

Further compounding the above price scenario is the current NYMEX move up the last few trading sessions. While we are getting a little profit taking today April future prices have moved up .14 per gallon since March 13th.

Prices are supported by bullish inventory and demand data. 

This week's EIA report shows crude oil inventories fell by 2.6 million barrels. This is happening in the face of increased production. 

  • Gasoline inventories fell 1.7 million barrels a day
  • Distillate inventories fell 2 million barrels a day
  • Refinery runs are at 91.7% of capacity 

What does it all mean? It means demand is strong and it's not even the driving season yet. The pros are bullish on price and buying on the dips and getting length and so on. 

Click here to see the shifts on demand.


Categories: US crude, RVP gasoline, spring fuel prices

George Butler

Written by

George Butler

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