US Atlantic Coast gasoline stocks saw a minor week-on-week increase for the week ended March 31 even as the total US saw a net decline in gasoline inventories, Energy Information Administration data showed Wednesday.
USAC gasoline in storage rose 280,000 barrels for the week ended March 31 to reach 65.9 million barrels as USAC imports surged, EIA data shows.
While the total US saw a roughly 16.5% increase in gasoline imports over the week, the USAC saw a 37.5% week-on-week rise.
The ballooning imports were "a surprise to us," a market source said.
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"I've been seeing barges heading south and diverting to Latin America over the last couple weeks. Trying to figure it out myself," the source said.
The source said refinery margins may have been a factor in rising imports.
"The refinery margins to produce winter-grade gasoline have been so good that [refineries] are producing winter grades for longer rather than switch to summer grades," the source said.
As regional refiners have been reluctant to produce more summer-grade gasoline, EPA data suggests that demand for lower RVP refined products is being increasingly met with imports.
"Last year, refiners switched to summer grade too early," which led to a supply glut for summer-grade gasoline, the source said.
"We were short on winter and long on summer gas," so refineries may be producing less heading into the summer driving season to avoid a repeat of last year, he said.
The four-week average for USAC refinery utilization was reported at 65.4% for the week ended March 24, a multiyear low. It was last lower at 64.5% for the week ended November 23, 2012.
--Seth Clare, firstname.lastname@example.org
--Edited by Jason Lindquist, email@example.com