Gasoline Holds Near Eight-Week High

US gasoline futures held near $3.40 a gallon, remaining close to their highest level in eight weeks, as expectations that Saudi Arabia could restore some of its disrupted exports eased immediate supply concerns. The kingdom indicated it could restore around half of the damaged East-West pipeline’s capacity within days and resume full operations within six weeks, while also offering additional cargoes through ship-to-ship transfers near Oman. Meanwhile, EIA data showed US gasoline inventories unexpectedly rose for a second consecutive week, increasing by 800 thousand barrels in the week ending September 11, as refineries continued to operate at elevated capacity, albeit at a slightly lower rate of 96.8%, while delaying non-essential work. However, approaching seasonal fall maintenance remains a threat to refined-product supplies.

US gasoline futures held above $3.45 a gallon, close to their highest level in eight weeks, as supply concerns persisted despite some relief after Saudi Arabia stated it would offer additional cargoes via Oman. Attacks last week by Iran-backed Houthi rebels shut down a crucial crude pipeline in Saudi Arabia that bypasses the Strait of Hormuz, which remains under a blockade. Meanwhile, EIA data showed US gasoline inventories unexpectedly rose for a second consecutive week, increasing by 800 thousand barrels in the week ending September 11th, as refineries continued to operate at elevated capacity, albeit at a slightly lower rate of 96.8%, while delaying non-essential work. However, the approaching seasonal fall maintenance remains a threat to refined-product supplies. The data also showed that demand increased by 300 thousand barrels per day, while pump prices continued to rise.

US gasoline futures held above $3.40 a gallon, near an eight-week high, amid a tightening outlook for energy supply from the Middle East. Attacks last week by Iran-backed Houthi rebels shut down a crucial crude pipeline in Saudi Arabia that bypasses the Strait of Hormuz, which remains under a blockade. Since the start of the US-Iran war, the crack spread has surged from the tens to above $60, reflecting that demand for refined products is outpacing refiners’ ability to produce them. Refiners had long warned about the impact of depleting crude reserves, and although operating near full capacity, delays to non-essential work have compounded the maintenance backlog ahead of seasonal fall maintenance, posing an ongoing threat to refined-product supplies. While UK authorities fear the pipeline could remain shut for as much as six weeks, US Energy Secretary Wright told reporters that it would reopen "very soon".