US Daily Oil Summary: US Gasoline Glut

US refiners are expected to keep producing too much gasoline in the months ahead, causing prices to keep finding downward pressure despite higher oil prices according to OPIS analyst Tom Kloza.

• US gasoline demand last week (Sun-Sat) stood at 8.64mbpd, down by 0.8% on the week and 1.4% below the four-week moving average according to GasBuddy.
• Weekly gasoline shipments from Europe to the US fell to 154kbpd in the week through 26 October, the lowest level since early April according to bills of lading and ship-tracking data compiled by Bloomberg.
• Retail prices for diesel in the US Midwest region are expected to fall in the coming weeks, as agricultural demand falls and supply is drawn from the USGC and Chicago pipelines, according to traders who spoke to Reuters.
• Looking at upstream, production at Bakken Shale formation in North Dakota is likely to increase following Chevron’s acquisition of Hess, according to OilPrice.com.
• USD: Firmer price action for major equity benchmarks have kept the greenback on the backfoot on Monday, with a very busy calendar ahead. The USD index slides 0.4% to start the week, with the associated gains broadly spread out among other G10 currencies.
• Sell-side analysts are unanimously agreed that the FOMC will leave rates on hold at the November meeting. Only a few analysts expect changes in the November FOMC Statement vs September’s. These are mostly minor mark-to-market changes to the descriptions of incoming growth / jobs data (nobody expects a change to the characterization of inflation as “elevated”).
• Saudi’s defense Minister Khalid bin Salman is set to visit Washington Monday to meet with senior Biden officials – as the Israel/Hamas war threatens to spill over into a wider conflict, a key factor driving oil in October.