U.S. gasoline futures experienced a 3% increase, reaching $2.07 per gallon. This surge is attributed to robust demand, diminished supply levels, and climbing oil prices. Crude oil prices saw a nearly 4% rise following OPEC+'s confirmation that it will continue with its planned output increment of 411,000 barrels per day in July, mitigating concerns of a more substantial hike. This marks the third consecutive monthly elevation at this pace, as the coalition endeavors to reclaim market share while regulating excessive production from member countries.
On the demand front, newly released data from the Energy Information Administration (EIA) indicated a notable surge in U.S. gasoline consumption, rising from 8.64 million to 9.45 million barrels per day during the week ending May 23. Concurrently, total gasoline inventories decreased from 225.5 million to 223.1 million barrels, highlighting a tightening supply scenario. Despite gasoline production increasing to 9.8 million barrels per day, apprehensions about supply persist, particularly as the hurricane season commences. The National Oceanic and Atmospheric Administration (NOAA) forecasts a 60% likelihood of an above-normal Atlantic hurricane season, with potential Gulf Coast storms posing a threat to refineries and supply chains, thereby exerting additional upward pressure on prices.
