Gasoline Eases From Two-Week High

US gasoline futures fell below $3.20 a gallon after rising to a two-week high, amid a reduced outlook for gasoline demand. Energy Secretary Wright stated that slowing demand following the end of the summer driving season could help rebuild inventories, which remain 6% below the five-year average, while US refineries are operating near full capacity, with some delaying seasonal fall maintenance to keep production levels elevated. Similarly, China, the world’s biggest crude importer, increased crude imports in August as refiners boosted production amid depleting inventories, offering some relief to a tight global refining market. However, gasoline demand in China is set to fall 8.7% in 2026, accelerating the elimination of excess refining capacity. Meanwhile, tensions in the Middle East intensified as the US military carried out strikes on Iranian tankers. Adding to the pressure, Ukraine attacked an energy facility in Russia’s Arctic for the first time.

US gasoline futures traded near $3.23 a gallon, near an over two-week high as refineries face increasing pressure from energy supply disruptions. Attacks were reported at several energy facilities in Saudi Arabia by Iran-backed Houthi militants, while a Russian refinery in the Perm region was also targeted by Ukraine. At the same time, US refineries are operating near full capacity, with some bringing forward seasonal fall maintenance to keep production levels elevated. Meanwhile, EIA data showed US gasoline inventories fell by 1.173 million barrels in the week ending August 28th, marking continued drawdowns in recent weeks. As a result, pump prices reached a record Labor Day average of $4.15 a gallon, despite easing demand following the end of the summer driving season, although further relief could come from the seasonal switch to the cheaper winter-blend. Meanwhile, Iran stated it had made progress with Oman on a temporary safe-passage route through the Strait of Hormuz.

US gasoline futures traded above $3.22 a gallon, extending gains to a two-week high as tensions remained elevated in the Strait of Hormuz amid strikes on vessels transiting near the waterway. Adding to the pressure, tensions between Russia and Ukraine show no sign of waning, despite the meeting between Ukraine and US envoys, as energy infrastructure continues to be targeted. As global refining capacity remains constrained, US refiners are largely out of capacity to boost further production, reflected in continued drawdowns in recent weeks as EIA data showed US gasoline inventories fell 1.173 million barrels in the week ending August 28th. Still, US Energy Secretary Wright stated that supply-side solutions were preferred to support energy flows, while other officials denied that a potential export ban was under consideration, adding that the end of the summer driving season could weaken gasoline demand, while changes to fuel-blending requirements could help boost production.