Gasoline Supply Outlook Uncertain

  1. Gasoline stocks lagging
  2. Gasoline demand recovering
  3. Cybersecurity heightened awareness
  4. Natural gas injection gains are slowing


Al pic 2009_cropped

Alan Levine—Chairman, Powerhouse
(202) 333-5380



The Matrix

Memorial Day is typically seen as the start of the summer driving season, reflected in higher retail prices. Memorial Day is also typically the top of RBOB futures pricing.

The Energy Information Administration’s weekly supply/demand balance reported stocks of gasoline at 232.5 million barrels for the week ended May 21, 2021. Comparable data for 2020 show inventories of 255 million barrels, some 22.5 million barrels higher than this year.

The lower inventory level this year results from the rapid recovery the U.S. economy is showing as COVID-19’s power diminishes. Gasoline demand clocked in at 9.5 million barrels per day. Last year, demand was held to 7.2 million barrels daily by lockdowns and similar constraints on business activity.

Adequacy of gasoline supply can also be measured by day’s supply. This statistic measures the number of days that inventory could be available if current demand was satisfied each day. The number can measure the influence of demand. Last week, gasoline storage stood at 25.6 days’ supply. Last year at this time there were 36.3 days’ supply. This occurred because demand had been severely limited by COVID-19 activity.

The comparable for 2019 was 24.4 days inventory, similar to 2021’s supply coverage, but 2019 was a far more typical year.

Influences on gasoline this year, of course, have been very different than in previous years. These impacts have been far-reaching, well beyond ordinary concerns of storage and demand. Closure of the Colonial Pipeline brought the market to matters of cybersecurity. The loss of East Coast gasoline translated into significant price volatility at retail but did not affect futures prices.

Expectations of above-average tropical storms (reviewed in prior Weekly Energy Market Situation columns) could instill anxiety and price volatility among traders.


Supply/Demand Balances

Supply/demand data in the United States for the week ended May 21, 2021, were released by the Energy Information Administration.

Total commercial stocks of petroleum fell by 7.7 million barrels during the week ended May 21, 2021.

Commercial crude oil supplies in the United States decreased by 1.7 million barrels from the previous report week to 484.3 million barrels.

Crude oil inventory changes by PAD District:

  • PADD 1: Down 0.1 to 7.9 million barrels
  • PADD 2: Down 1.7 million barrels to 132.8 million barrels
  • PADD 3: Down 1.9 million barrels to 270.4 million barrels
  • PADD 4: Down 0.1 million barrels to 25.3 million barrels
  • PADD 5: Plus 1.9 million barrels to 47.9 million barrels

Cushing, Oklahoma, inventories were down 1.0 million barrels from the previous report week to 44.8 million barrels.

Domestic crude oil production was unchanged from the previous report week at 11.0 million barrels daily.

Crude oil imports averaged 6.273 million barrels per day, a daily decrease of 138,000 barrels. Exports increased 127,000 barrels daily to 3.433 million barrels per day.

Refineries used 87.0% of capacity, 0.7 percentage points higher from the previous report week.

Crude oil inputs to refineries increased 123,000 barrels daily; there were 15.239 million barrels per day of crude oil run to facilities.

Gross inputs, which include blending stocks, rose 123,000 barrels daily to 15.742 million barrels daily.

Total petroleum product inventories fell 6.0 million barrels from the previous report week.

Gasoline stocks fell 1.7 million barrels from the previous report week; total stocks are 232.5 million barrels.

Demand for gasoline rose 254,000 barrels per day to 9.479 million barrels per day.

Total product demand increased 685,000 barrels daily to 19.956 million barrels per day.

Distillate fuel oil stocks fell 3.0 million barrels from the previous report week; distillate stocks are at 129.1 million barrels. EIA reported national distillate demand at 4.461 million barrels per day during the report week, an increase of 403,000 barrels daily.

Propane stocks fell 0.4 million barrels from the previous report week; propane stocks are 44.1 million barrels. The report estimated current demand at 1.058 million barrels per day, an increase of 7,000 barrels daily from the previous report week.


Natural Gas

Injections into underground storage have been lagging historical comparisons. It’s early into the natural gas injection period, but some analysts believe that last week’s report of a 115 Bcf injection could be the only three-digit injection of the 2021 injection season. The expected shortfall reflects hotter weather raising demand for power at the expense of storage-building. Export demand has taken supply. Production has been uninteresting as well.

According to the EIA:

The net [natural gas] injections into storage totaled 115 Bcf for the week ending May 21, compared with the five-year (2016–2020) average net injections of 91 Bcf and last year’s net injections of 105 Bcf during the same week. Working natural gas stocks totaled 2,215 Bcf, which is 63 Bcf lower than the five-year average and 381 Bcf lower than last year at this time.


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