FX.co ★ Gasoline Falls Toward Near 4-Year Low

Gasoline futures slated for delivery in New York Harbor have dropped below $1.85 per gallon, marking the lowest point since they hit nearly four-year lows at $1.80 in early October. This decline is largely attributed to the expectation of a continued abundant supply of crude oil and refined fuel. The sufficient crude oil feedstock available for refineries is anticipated to remain steady as we move into the new year. This situation arises from OPEC+ countries implementing a series of production increases to recapture the market share they lost when the COVID-19 pandemic led to significant cuts in output. Furthermore, major non-OPEC oil-producing nations such as the United States, Canada, and Brazil have indicated that their prominent producers will continue to ramp up extraction activities. Correspondingly, rates for supertankers have surged to unprecedented highs as seaborne oil exports have escalated in the fourth quarter. The downward pressure on gasoline futures has persisted in spite of U.S. sanctions on Russian energy giants Lukoil and Rosneft, which have compelled significant importers like India to seek supplies from other producers, leaving several vessels from Russia’s unofficial fleet idle in December.