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USGC gasoline prices reach multi-month highs on strong domestic, export demand

Houston (Platts)--29 Mar 2017 555 pm EDT/2155 GMT


Substantial demand and bullish data propped up US Gulf Coast gasoline prices Wednesday, lifting primary grade outright values to their highest levels in months.

Conventional 9 RVP gasoline (M2) for Colonial Pipeline loading in Pasadena, Texas, rose 5.2 cents compared with Tuesday to $1.6159/gal, the highest outright price since January 13's $1.6262/gal. CBOB at 9 RVP (A2) increased as well, jumping 5.45 cents to $1.5509/gal. The last time CBOB barrels were more expensive was February 27, when they were $1.5642/gal.

The majority of the move came in the late morning after the release of weekly US Energy Information Administration data. Before the Platts Market on Close assessment process, M2 was heard bid up to the NYMEX May RBOB futures contract minus 6 cents/gal from Tuesday's assessment at NYMEX May RBOB minus 7.25 cents/gal.

Likewise, late morning trading and an offer left standing in the Platts assessment process moved the A2 differential 1.75 cents/gal higher day on day.

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One source pointed to Wednesday's EIA data as the likeliest cause for the strength.

The data showed Gulf Coast gasoline stocks fell about 1.5 million barrels in the week that ended March 24 to 78.489 million barrels, a five-month low. Conversely, US product supplied -- a proxy for national demand -- rose 324,000 b/d to 9.524 million b/d, a more than six-month high.

"Domestic demand is decent, with Gulf Coast [refinery] runs still curtailed with turnarounds," a second source said.

The second source also cited export demand.

"There seems to be decent export demand underlying the market, sopping up a lot of otherwise excess barrels," he said.

While Mexico has lately been a significant destination for Gulf Coast conventional gasoline, the second source said Venezuela has also been looking for gasoline barrels, and that the arbitrage for shipments to Europe reopened earlier this week.

Related Capitol Crude podcast:The US isn't the only partner available to assist in Mexico's hydrocarbon reforms

--Jennifer Pedrick, jennifer.pedrick@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com

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