Gasoline Declines to Two-Week Low

US gasoline futures fell below $3.20 a gallon to a two-week low as fuel supplies showed signs of recovery. According to the EIA, US gasoline inventories rose by 3.5 million barrels in the week ending October 9th, marking a second consecutive weekly build and easing concerns over tight supplies. The reading follows the IEA’s announcement that it will complete the release of 100 million barrels of oil agreed in March, amid pressure from US officials to curb high fuel prices. Additionally, Russia reported that the release of its diesel supplies had begun reaching global markets. However, geopolitical risks remain elevated as Russia and Ukraine move further away from a US-backed energy truce. Ukrainian President Zelenskyy ordered continued strikes on Russian refineries, while President Putin downplayed their impact. Attacks on tankers transiting the Strait of Hormuz and by the Yemen’s Iran-backed Houthi militia added to concerns over disruptions to global oil flows.

US gasoline futures fell to around $3.20 per gallon on Thursday, hitting a two-week low, as investors assessed a US proposal to ease sanctions on shadow fleet tankers to reduce petroleum shipping costs and facilitate oil flows. The discussions follow President Donald Trump's temporary easing of sanctions on Russian diesel exports last week, although analysts have questioned the deal's potential to lower fuel prices given the relatively small volume involved. Meanwhile, Russia accused Ukraine of attacking two oil refineries, including the 400,000-barrel-per-day Ryazan facility, raising doubts over the prospects for an energy truce announced by Trump. Separately, continued attacks on shipping near the Strait of Hormuz continues to pose risks to global oil flows. On the inventory front, API data showed that US gasoline stocks rose by 1.1 million barrels in the week ended October 9.

US gasoline futures traded around $3.25 a gallon, holding most of its recent losses, as traders continue to weigh the impact of fuel supplies from Russia. While Russia had agreed to supply diesel to global markets to help lower fuel prices, experts believe the deal announced by President Trump to be very small, equal to just about 10 days of total US demand or slightly more than a single day of global demand. Prospects of a Russia–Ukraine energy ceasefire also remain in focus as Russia continued to attack Ukrainian energy facilities, contrary to President Trump's claims of an immediate truce. Both Ukraine and Germany have pushed for strike bans to include Ukrainian electricity infrastructure as well as Russian refineries. Attacks on tankers crossing the Strait of Hormuz also remain risks to feedstock supply. Against this backdrop, pump prices remain elevated, with 12.1% of global refining capacity offline as of September, although prices have eased in recent weeks.