FX.co ★ Gasoline Hits 1-Month Low

Gasoline futures for delivery in the New York Harbor dropped below $1.85 per gallon, reaching a one-month low, as oil benchmarks weakened amid intensified diplomatic efforts between Ukraine and Russia. This diplomatic engagement has heightened the possibility of easing wartime constraints on Russian oil exports. Ongoing discussions about a U.S.-backed peace framework, alongside direct U.S.-Russia contacts, suggest that some export restrictions might be lifted. Such a move could result in increased crude and refined product flows into a market that is already leaning toward oversupply. The International Energy Agency (IEA) has forecasted a larger surplus for the coming year. Coupled with output increases by OPEC+ and rising production from non-OPEC countries like the United States, Canada, and Brazil, the market is expected to have ample forward supply. This situation has dampened traders' willingness to pay a premium for near-term cargoes. Additionally, recent data from the Energy Information Administration (EIA) revealed an unexpected rise in U.S. gasoline stocks by 2.4 million barrels in the week leading up to November 14th. This increase defied expectations of a slight drawdown, which would have extended a six-week trend of withdrawals and provided seasonal support.