Front-month RBOB gasoline futures concluded the trading week near $2.01 per gallon, securing a notable weekly advance of approximately 5%. The contract traded within a narrow range on Friday, demonstrating stability after the week's upward move.
The rally in wholesale gasoline prices was fueled by fundamental data indicating a tightening market. According to the U.S. Energy Information Administration (EIA), domestic gasoline inventories declined by 3.2 million barrels for the week ended February 13, bringing total stocks down to 255.8 million barrels. Concurrently, implied demand, measured by product supplied, increased to 8.75 million barrels per day. Refinery utilization also jumped to 91%, marking its highest point in a month.
"Support for oil prices came from a very bullish EIA report," noted Giovanni Staunovo, an analyst at UBS. Phil Flynn of Price Futures Group attributed part of the demand strength to drivers "getting their cars out of the snow," suggesting a post-weather rebound in consumption.
These wholesale moves are a critical leading indicator for consumers. The national average price for a gallon of regular unleaded gasoline currently stands at $2.92, according to the latest reading from the American Automobile Association (AAA). This represents a marginal decrease from the prior week. However, the consumer group cautions that pump prices are likely to begin an upward trajectory in the coming weeks as the industry transitions to producing more expensive summer-blend fuel, which is formulated to reduce evaporation in warmer temperatures.
The EIA's weekly survey placed the national average at $2.924 per gallon for the week ending February 16, with significant regional disparities. Drivers on the West Coast faced an average price of $4.045. Market participants are closely monitoring the lag between futures market rallies and their eventual reflection at retail stations, with the next EIA retail price update scheduled for February 24.
The favorable refining environment was reflected in the equity performance of major sector players. Valero Energy shares advanced 0.9%, while Phillips 66 posted a more modest gain of 0.3%. Marathon Petroleum shares ended the session essentially unchanged.
Investors in the refining sector closely monitor the gasoline crack spread, which represents the profit margin between the cost of crude oil and the price of finished gasoline. A widening spread, as seen this week, signals stronger profitability for refiners. However, this dynamic can shift rapidly. Analysts note that factors such as the return of refinery units from planned maintenance, an increase in gasoline imports, or a downturn in the underlying crude oil market could swiftly increase supply and pressure wholesale prices lower.
The current market strength underscores the sensitivity of energy prices to inventory fluctuations and seasonal demand patterns. With refinery runs increasing and inventories drawing down, the fundamental backdrop remains supportive for gasoline in the near term. The focus now turns to whether consumer demand will sustain its recent uptick and how quickly the rising wholesale costs will translate into higher prices at the pump for American drivers.
