By Shariq Khan
NEW YORK (Reuters) – U.S. gasoline futures fell almost 6% on Tuesday to their lowest since December 2021, as the tip of the driving season weighed on demand for the motor gasoline amid a sell-off within the broader oil market.
Gasoline futures for October deliveries settled 5.5% decrease at $1.98 per gallon, their greatest losses in a single session since July 2022.
The motor gasoline was the most important decliner amid a broader power market sell-off on Tuesday, as the tip of the summer season driving season within the nation and ample inventories put extra stress on gasoline, Rabobank strategist Joe DeLaura mentioned.
The Labor Day vacation, celebrated on the primary Monday of September, is taken into account the tip of the summer season driving season in the US.
In the meantime, U.S. crude oil futures fell 4.4% to $70.34 a barrel on Tuesday, their lowest settlement since December 2023.
Decision of disputes that led to decrease Libyan oil output and exports has eased provide constraints, whereas weak manufacturing knowledge from China reignited issues of poor demand within the prime oil-importing nation. [O/R]
The sharp decline in oil costs may push retail gasoline to its lowest since 2021 by the tip of October, Gasbuddy analyst Patrick De Haan posted on social media.
The price of crude oil is the most important part of the price of gasoline on the pumps, based on the U.S. Vitality Data Administration.
On the U.S. Gulf Coast refining hub, gasoline was buying and selling near underneath $2 a barrel and technical elements are suggesting extra draw back forward, gasoline distributor TACenergy mentioned in a be aware.
“The driving season has ended as power markets begin September buying and selling with an enormous selloff in gasoline costs,” they mentioned.
Gasoline futures for essentially the most rapid supply have been at their lowest premium to the following contract since June. Greater future costs are a sign for merchants to retailer extra product as an alternative of promoting at low costs.
U.S. gasoline stockpiles stood at 218.4 million barrels by Aug. 23, 0.5% increased than final 12 months.
(Reporting by Shariq Khan in New York; enhancing by Jonathan Oatis)
