US gasoline futures hovered around $3.60 per gallon, holding near their highest level since May 19, as expectations of tighter fuel markets outweighed earlier optimism over potential US–Iran diplomatic progress.
Energy Secretary Wright has cautioned the oil industry to prepare for possible restrictions on US diesel exports, a measure also supported by the President despite mounting opposition from industry groups and some policymakers. In an already tight fuel environment, a ban on diesel exports could lead US refiners to reduce crude runs by about 12%, according to S&P Global Energy CERA, further constraining overall fuel supplies.
With winter approaching and heating demand set to increase, refiners are prioritizing production of higher-priced diesel, which is tightening gasoline supplies. US gasoline inventories unexpectedly fell by 1.7 million barrels in the week ending September 18, according to data from the EIA.
Additional upward pressure on prices is coming from ongoing Ukrainian attacks on Russian refining infrastructure. In response to domestic supply concerns, Russia is expected to extend its diesel export ban beyond September, reinforcing the bullish backdrop for global fuel markets.
