Gasoline Futures Retreat

US gasoline futures fell below $2.75 per gallon, reaching their lowest level since early March, amid expectations of further diplomatic efforts in the Middle East. An unconfirmed report suggested Iran had softened its demands over the Strait of Hormuz, while US President Trump’s remarks that extensive strikes on Iran were “highly unlikely” further lifted sentiment. However, supply concerns persist. Ukraine struck Russia’s second-largest refinery, disrupting its gasoline and diesel production and raising questions over the agreement between Presidents Putin and Trump on supplying Russian diesel to global markets. In the US, inventories remain below seasonal norms, with EIA data showing a further decline of 222,000 barrels in the week ended October 30. The agency also expects US refiners to shift production away from gasoline towards higher-margin middle distillates, including diesel and jet fuel. Seasonal refinery maintenance could further tighten gasoline supplies.

US gasoline futures hovered around $2.75 a gallon, near their lowest level since early March, as traders weighed tight fuel supplies against expectations of faster progress towards ending the US-Iran war. Iran reported that three tankers had been damaged in the Strait of Hormuz, highlighting the risks to shipping through the vital waterway. Supply concerns were reinforced by EIA data showing US gasoline inventories fell by 222,000 barrels in the week ending October 30th, leaving stocks persistently below their five-year average. An EIA report also pointed to an expected shift among US refiners away from gasoline towards middle distillates, including distillate fuel oil and jet fuel, as those carry more attractive prices. Seasonal refinery maintenance could further constrain gasoline supplies. However, a Democratic takeover of the US Congress raised the prospect of greater constraints on military escalation while de-escalation efforts by Qatar continue in the Middle East.

US gasoline futures held near $2.75 a gallon, close to their lowest level since early March, as expectations of faster progress toward ending the US-Iran war weighed on prices. Democrats' victory in both chambers of Congress in the US midterm elections raised the prospect of greater constraints on military escalation and renewed diplomatic efforts. Adding to bearish pressures, Energy Secretary Wright said the administration is working with refiners to boost output and restart idled facilities, noting that prices peaked in September and should decline further. However, supply conditions remained tight as EIA data showed that US gasoline inventories fell by 222 thousand barrels in the week ending October 30th, leaving it 2% below the five-year average. Seasonal refinery maintenance and a shift toward diesel production ahead of winter could also constrain gasoline supply.