U.S. gasoline futures advanced on Wednesday, with the national average retail price climbing above $4.12 per gallon, according to data from AAA. The move reflects ongoing supply concerns as inventories remain well below year-ago levels.
October RBOB gasoline futures rose 0.86% to $3.1621 per gallon as of 08:40 EDT, extending gains from earlier in the session. The contract had traded at $3.1158 at 04:00 EDT before climbing to $3.1625 by 08:30.
AAA reported the average price of regular gasoline at $4.1203 on September 2, up 2.49 cents from the previous day and 93.34 cents higher than the same time last year. The year-over-year increase stands at 29.3%.
The gap between retail prices and futures remains significant, with the pump price nearly 96 cents higher than the futures contract. This differential reflects taxes, ethanol blending, distribution costs, retail margins, and regional basis variations, rather than pure refiner profitability.
Supply Constraints Persist
U.S. motor-gasoline inventories fell by 2.536 million barrels to 206.842 million barrels in the week ending August 21, according to the Energy Information Administration. Stocks are now 7.0% lower than a year ago, leaving limited cushion heading into the seasonal refinery maintenance period.
Refineries processed 17.393 million barrels of crude per day, up 3.0% from a year earlier, yet gasoline stocks still declined. Demand remains subdued, with finished gasoline supplied averaging 8.932 million barrels per day over the past four weeks, down 1.1% compared to the same period last year.
However, weekly data showed delivered volume rose 4.1% to 9.043 million barrels per day compared to the prior week, suggesting some consumption pickup.
Taxes and Crude Prices
Taxes play a significant role in the retail-futures spread. The EIA notes a federal tax of 18.4 cents per gallon and an average of 33.55 cents in state taxes and fees, which together account for a substantial portion of the difference.
Crude oil prices remain a key driver. At 08:41 EDT, October U.S. crude futures were priced at $89.61 per barrel, down 0.68%. The recent rally in crude has contributed to higher wholesale gasoline costs.
Market Outlook
The market is now focused on the EIA's weekly petroleum status report, due at 10:30 EDT Wednesday. An unexpected rise in inventories could halt the recent gains in futures, while refinery disruptions or supply interruptions could push wholesale prices higher.
AAA's daily gauge shows the national average has climbed steadily over the past week, and with inventories at reduced levels, any further supply disruptions could keep upward pressure on prices.
Retail prices have been slower to react than futures, but the current trajectory suggests motorists may face higher costs at the pump in the coming weeks.
