Gasoline prices at the rack in Houston, Texas, have recovered from their recent year-to-date lows, tracking gains seen for the entire oil complex and ahead of what could be the most heavily traveled US Independence Day holiday weekend ever.
The price for unbranded, unleaded regular grade gasoline was $1.4046/gal in Houston Monday morning, the lowest value of 2017 to date, according to the twice-daily Telvent/DTN rack survey. But as of Friday morning, the price had rallied to $1.4506/gal, the same data showed.
Unleaded, unbranded premium gasoline followed a similar pattern, the survey showed. The product hit a new 2017 low on June 22 of $1.7546/gal, but edged up to $1.8078/gal as of Friday morning.
These stronger prices no doubt reflect a rally seen across the entire oil complex and in futures markets in recent days. The front-month NYMEX RBOB futures contract has recovered from its year-to-date low of $1.4105/gal on June 21; it settled at $1.4856/gal Thursday evening, S&P Global Platts historic data showed.
But rising rack prices could also reflect expectations of stronger gasoline demand, which has been lackluster for the year so far. Total US product supplied of finished motor gasoline -- which the US Energy Information Administration uses as a proxy for demand -- averaged 8.9 million b/d from the start of the year through the end of May, according to the agency's latest monthly data. This is below the same figure for same period last year, which averaged 9.2 million b/d, EIA data showed.
AAA, an auto club, has bullishly predicted that 2017 will be the most traveled Fourth of July holiday weekend ever, according to its 2017 Independence Day Travel Forecast report.
AAA expects that 44.2 million Americans, aided by cheaper gasoline and car-rental prices, will travel 50 miles or more away from home over the weekend, more than ever before and a 2.9% increase over last year. It was unclear, however, if expectations of strong gasoline consumption over the weekend were offering much support to US Gulf Coast gasoline cash prices, which were on par with their Thursday evening assessment on Friday morning. For instance, 9 RVP RBOB was bid at August NYMEX RBOB futures minus 3.25 cents/gal and offered at futures minus 2.50 cents/gal after settling at futures minus 2.75 cents/gal Thursday night.
Multiple market sources complained that spot trading for gasoline was thin Friday as some brokers and traders seem to have taken the day off from work. "It's time for me to go home," one market source said early Friday morning.
