Gasoline Demand Faltering amid Economic Pressures: BNEF

Seasonally adjusted gasoline demand is under pressure in H2 as elevated interest rates hit consumer spending, according to BNEF.

• Vehicle miles travelled is 4% below the 2017-19 averages, while shrinking personal savings relative to disposable income could slash discretionary trips.
• Gasoline crack spreads are 31% below the previous five-year average (excluding 2020) and may narrow further with inventories above the five-year average since May, BNEF added.
• Gasoline inventories in NWE are 16% below the 2023 levels and are 7% below the five-year-average, excluding 2020.
• Falling stockpiles in NWE are partly caused by Red Sea shipping disruptions and could support US gasoline exports as monetary policy eases.
• Inland refiners like HF Sinclair, CVR Energy, and Delek are most exposed to softening domestic demand and weak gasoline margins. This is due to limited export potential.