Gasoline Prices Ease Slightly

Gasoline futures for delivery in New York Harbor were slightly down at $3.57 per gallon on Friday as hopes for an end to the U.S.-Iran conflict increased after Pakistani officials confirmed that Iran had sent an updated peace proposal. However, prices remained near a four-year high as Middle East supply disruptions continued to tighten feedstock supply for refiners. The naval blockade of the Strait of Hormuz has remained in place since early March, disrupting around 20 million bpd of oil and refined products for major importers. Jet fuel and diesel shortages in Europe and Asia have also pushed refiners to prioritize distillate production over motor gasoline, exacerbating supply risks, while U.S. gasoline stocks fell by 6.1 million barrels in the week ending April 24, above expectations of a 2.1 million-barrel draw and marking the 11th straight decline, with prices rising nearly 13% in April.

Gasoline futures for delivery in New York Harbor rose to $3.65 per gallon, the highest since June 2022, as ongoing Middle East supply disruptions continued to tighten feedstock supply for refiners. The US and Iran showed no signs of caving to each other’s agreement terms, extending the naval blockades on both sides that prevent the transit of oil and product tankers through the Strait of Hormuz. Normal shipping activity through the chokepoint has been halted since the start of March, disrupting 20 million bpd of oil and refined products for major importers. On top of that, jet fuel and diesel shortages in Europe and Asia drove major energy producers to prioritize their refining capacity for distillates instead of motor gasoline, exacerbating supply risks. Consequently, US gasoline stocks fell by 6.1 million barrels for the week ending April 24th, above expectations of a 2.1 million barrel draw and marking the 11th straight decline. Prices climbed nearly 13% in April.

Gasoline futures for delivery in New York Harbor climbed above $3.60 per gallon in late April, the highest since July 2022, as ongoing Middle East supply disruptions continued to tighten feedstock supply for refiners. Reports showed that President Trump has ordered preparations for a prolonged blockade of Iran, adding to concerns over deeper supply disruptions in the Strait of Hormuz. While a ceasefire has been in place since early April, it has remained fragile amid recurring tensions, with traders monitoring any signs of negotiation developments. Shipping activity through the Strait has effectively stalled, with vessel movements falling to near zero and severely disrupting a key artery that typically handles around 20 million barrels per day of oil and refined products. Against this backdrop, API figures showed gasoline inventories fell by 8.47 million barrels last week. For the month, gasoline is heading for its fifth consecutive monthly advance.