On top of $90 oil prices, the futures market also points to further pain at the pump for American consumers. Gasoline futures at NYMEX are trading at their highest premium to crude oil for this time of the year in nine years, according to Bloomberg's estimates.
On Thursday, the gasoline futures contract was around $18.50 per barrel above crude as U.S. refiners have started the maintenance season. The highest premium of gasoline futures over crude since 2013 signals that motor gasoline supply could be tighter than expected this summer when U.S. gasoline demand is expected to return to pre-COVID levels.
Gasoline demand in the summer of 2022 will likely be close to the 2019 level, which "was close to peak gasoline demand," John Auers, executive vice president at Turner Mason, told Bloomberg.
In the U.S., total motor gasoline inventories increased by 1.3 million barrels in the week to January 21, the Energy Information Administration (EIA) said in its weekly petroleum inventory report on Wednesday. Despite another weekly build in gasoline stocks, total gasoline inventories continue to be around 2 percent below the five-year average for this time of year, the EIA data showed.
Gasoline prices, meanwhile, continue to rise across the United States. As of January 27, the national average price of a gallon of regular gasoline is $3.348, according to data from AAA. That's up from $3.286 a gallon one month ago, and compares to $2.408 a gallon Americans paid for gasoline at this time last year.
Oil prices have rallied by around 13 percent since the start of 2022, on the back of resilient global demand and geopolitical risk premiums coming from the Russia-Ukraine tension and attacks on the UAE from the Iran-aligned Houthis.
U.S. average gas prices at $3.35/gal currently are now just 9 cents below the 2021 peak of $3.44, while diesel is at a more than seven-year high of $3.68/gal, Patrick De Haan, head of petroleum analysis for fuel-savings app GasBuddy, tweeted on Wednesday.
By Tom Kool for Oilprice.com
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Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations More
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