Gasoline Prices Likely To Remain Elevated: Energy Aspects

The gasoline and markets are likely to see elevated prices due to low storage levels, Energy Aspects Founder and Director Amrita Sen told CNBC in an interview.

• “We still think the whole system is pretty precarious given how low inventories are and we still expect to see at least gasoline prices high at the pump for a while.” Sen said.
• Sen added that the higher cost of capital with higher interest rates has made it expensive to store both crude and products, despite the market being in contango, which typically encourages re-stocking.
• She also said that the current refinery landscape will make it difficult to ramp up production due to extreme heat. “We have seen a few new starts in the Middle East, but the rest of the world hasn’t been operating fully. There has been a lot of unplanned outages and particularly due to the heat, refineries in Europe have had to restrain their operations.”
• Refineries also face a ‘headache’ because of an increase in light crudes coming to the market. Sen said that these are more difficult to process in the summer because of a higher yield of naphtha, whose margins have been very weak.