US gasoline prices have eased considerably over the past year in inflation adjusted terms, allowing consumers to shift expenditures elsewhere. While we expect prices to rise from here on depleted PADD 1 inventories and an uptick in US demand, a rerun of the extremes from last year look unlikely. Consumer expenditures as a percent of the total consumption basket will not exceed 3% (down from levels near 4% last summer).
OPEC+ members remain committed to keeping output quotas unchanged until the end of this year, with the group expected to gradually take back market share over time as non-OPEC sources of supply run out of steam.
We have repeatedly called for a sustained opening of the transatlantic gasoline arbitrage in order to help ease the tightness seen in the US market. But is our freight-adjusted arb incentive the best measure to look at? By re-calculating the direct blending of ethanol into margins and arb estimates for a refiner producing and distributing E10, we find that not only are there gains to be made in terms of profitability but also that arbitrage conditions are already much more favorable than those for regular gasoline.
Global jet fuel demand continues its post-pandemic recovery, but predictably, the regions that began to open up first have seen the most robust improvements. The US and Europe will drive the net balance into deficit in the second half of the year, while Asia lags behind.
Europe remains highly dependent on Russian clean product exports, particularly gasoil/diesel. As we head towards the embargo, it was expected that reliance had fallen, not risen. The ban will, however, bring about a change in global trade patterns for both middle and light distillates.
As the United States is establishing itself as one of the world’s top crude oil exporters and getting its oil a wide range of destinations, it is increasingly important to have accurate and timely information on American crude export flows, especially at a time when a tightly supplied market riddled with geopolitical uncertainty.
European security of gas supply is a topic that won't be going away any time soon. In this article, we discuss the latest proposals by the European Commission to introduce a 80% gas storage target by 1 November and Friday's deal between US and the Europe Union to increase LNG supplies by 15 bcm this year.
As Russian crude oil exports could decrease by 1.5 mbd from next month onwards according to our estimates, we look to what extent US shale production could offset the impact thanks to its business model with high flexibility and reactivity.
As oil prices soar to new multi-year highs, US consumers are having to deal with rising gasoline prices along with widespread inflation elsewhere. While the US administration appears unwilling to stimulate and incentivize domestic oil production, comparatively cheap natural gas is giving refiners one less cause for concern.