With the U.S. roughly at the midpoint of the summer driving season, gasoline demand remains tepid, leading to some aggressive selling in physical markets that could suggest futures prices may be frothy.

Gasoline futures over most of the last 10 years have rallied in mid-July and mostly remained strong into August and September. The average increase in RBOB futures over that period has been about 27%, putting RBOB contracts at about $2.92/gal.

But there are no signs that the gasoline benchmark will be able to strengthen without the help of tropical weather-induced refinery issues.

The NYMEX August RBOB contract was down 1.73cts to $2.4986/gal Monday. Spot gasoline in all U.S. markets are trading at steep discounts to futures. The discounts range from about 6cts/gal in New York to 18-22cts/gal in the Midwest and 23.5cts/gal along the Gulf Coast.

Western spot markets are particularly shaky with cash CARBOB available at 13-15cts below futures in California and the Pacific Northwest.

On a macro level, there are few steering currents.

Chinese demand remains disappointing by all accounts and summer hasn't led to much maintenance that would diminish crude-oil output in the North Sea or in the Canadian oil sands.

Russia is making some noise about possible curtailments of gasoline exports, but that likely wouldn't happen until August.

Most crude-oil contracts retreated. While there is some speculative length in the Brent crude market, it hasn't led to more than small price increases.

The NYMEX West Texas Intermediate contract was off 12cts to $82.09/bbl and September Brent was unchanged at $85.03/bbl.

The NYMEX August ULSD contract was 1.29cts higher at $2.5225/gal and spot prices in most cash markets were up by similar amounts.

Distillate margins remain strong by historical standards, though there are concerns about weak domestic demand trends.


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal. 


 
   -- Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Jeff Barber,   jbarber@opisnet.com

(END) Dow Jones Newswires

07-15-24 1249ET