FX.co ★ Gasoline Tumbles to Over 4-1/2-Year Lows

Gasoline futures in the United States declined to below $1.85 per gallon in early October, reaching their lowest point in over four and a half years. This drop was driven by an influx of crude supply and a decrease in demand for refined fuel, which squeezed profit margins and eliminated typical seasonal support. In September, OPEC+ increased production by approximately 330,000 to 400,000 barrels per day, as Saudi Arabia and other countries resumed previously halted output. This surge in supply added to near-term crude availability and limited price increases in oil benchmarks. Furthermore, data from the Energy Information Administration (EIA) for the week ending September 26th revealed a decrease in motor gasoline demand by about 440,000 barrels per day to 8.5 million barrels per day. Concurrently, commercial crude inventories grew by roughly 1.8 million barrels, and refinery operations reduced by approximately 308,000 barrels per day. These factors combined to narrow gasoline crack spreads to their weakest levels since March.