BAKU, Azerbaijan, December 26. Annual average US retail gasoline price is expected to decrease from over $3.50/gal this year to below $3.40/gal in 2024, Trend reports.
According to the US Energy Information Administration Agency (EIA), gasoline inventories in the US typically see an uptick from the end of October to the close of January. This trend is driven by refineries wrapping up scheduled maintenance and increasing operations during a period when motor gasoline demand hits its lowest point for the year. The boost in motor gasoline inventories serves to balance production and consumption, especially as refinery maintenance peaks in February and motor gasoline consumption rises in the spring.
In the current season, the EIA forecast indicates an inventory build of 30 million barrels from the end of October 2023 to the end of January 2024. Despite this expectation of a below-average inventory increase, US gasoline inventories are currently higher than they were at this time last year, a trend we anticipate to continue into January 2024.
The agency noted that futures prices for RBOB, the gasoline blendstock widely used across the country, show a higher trend for delivery in spring 2024 compared to the upcoming winter. This dynamic encourages both refiners and storage operators to boost inventories, aiming to capitalize on selling when prices are at their peak.
For the period ending December 7, the RBOB futures price for April 2024 delivery averaged $2.29/gal, contrasting with the $2.08/gal for the RBOB futures price set for January 2024. Anticipating a rise in US gasoline inventories, the EIA projects a 15 cents/gal reduction in US gasoline crack spreads in 2024 compared to 2023. These lower crack spreads led the agency to revise its forecast for the annual average U.S. retail gasoline price.
