• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 3 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 3 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 2 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 1 hour Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 3 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 2 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 4 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 19 hours Itt looks like natural gas may be at its lowest price ever.
  • 5 hours Saudi A to Splash $100 Bln on India
  • 22 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 5 mins Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 13 hours NEW FERUKA REFINERY
  • 6 hours Washington Eyes Crackdown On OPEC
Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Trending Discussions

Oil Rises On Weaker Dollar, Stronger U.S. Economic Growth

Amid a better-than-expected U.S. GDP print and a slightly softer dollar, oil prices are on the rise today. Gasoline, however, is on the move lower - and something we hone in on for today's blog. Hark, here are five things to consider in oil (and gasoline!) markets today:

1) Mexico is looking to remove price subsidies on gasoline starting next March, as the country continues to liberalize its energy market. Pemex controls all upstream and downstream oil activities, and has done for over 75 years, but as Mexico looks to pivot away from a state monopoly to create a more competitive environment, the removal of subsidies could see retail prices jump 15 percent or more.

As Mexico's refineries have become ever more decrepit amid a lack of investment, reliance on gasoline imports has continued to grow. As our ClipperData illustrate below, U.S. gasoline export loadings to Mexico have averaged over 370,000 barrels per day so far this year, up over 25 percent on year-ago levels:

(Click to enlarge)

2) Mexican gasoline price liberalization is to be rolled out gradually in five stages (red = Mar 30, orange = Jun 15, yellow = Oct 30, green = Nov 30, blue = Dec 30).

Mexico has 11,400 gas stations, with about a third of them concentrated in the six largest states. The gas station penetration rate is 9 stations per 100,000 people - compared to 36 per 100,000 in the United States.

(Click to enlarge)

3) While on the topic of gasoline, retail gasoline prices are up to $2.26/gal on the national average - the highest since early October. As the OPEC production cut-sponsored crude rally works its way into the gasoline price, we are seeing prices rise into the end of the year, when we traditionally see them dipping towards their lowest ebb. Related: The Shale Oil Threat Will Not Go Away

(Click to enlarge)

4) Crude oil as an input for gasoline accounts for some 50 percent of the price (the rest is 21 percent for taxes, 19 percent for distribution and marketing, and 12 percent for refining). Hence, gasoline prices are rising due to higher crude prices, even though demand is 3 percent lower than last year (using gasoline product supplied on the 4-week moving average as a proxy for demand). Meanwhile, inventories also remain elevated versus both last year and the five-year range:

(Click to enlarge)

5) Finally, EIA's 'This Week in Petroleum' addresses the Department of Energy's decision to start selling crude from the strategic petroleum reserve (SPR), starting as soon as next month. Nearly 190 million barrels of the ~695 million barrel reserve is to be sold from 2017 to 2025.

There are several different tranches of sales which have been approved by Congress, as highlighted below. As a member of the IEA, the U.S. is obligated to maintain inventories to cover at least 90 days of net imports. This number is currently closer to 140 days.



By Matt Smith

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News