July 20, 2015 – San Antonio Express News
$2 gasoline on the way, but not until the fall (page 7)
By: Rhiannon Meyers
Cheap fuel has reignited the nation’s appetite for gasoline after years of declining demand and spurred U.S. refineries to push their plants to the limits.
“The bottom line is that gasoline demand is coming back after all those years of decline,” RBN analyst Sandy Fielden wrote in the report.
Between 2007 and 2012, gasoline demand plunged by 6.5 percent as auto makers rolled out more fuel-efficient vehicles to meet new, more stringent federal standards, and consumers reeling from the Great Recession drove less and bought smaller cars, according to a new analysis by RBN Energy.
“By the end of 2012, gasoline demand had begun to look like an endangered species,” Fielden wrote.
To offset declining domestic demand, refineries looked to foreign markets, mostly Latin America, to export fuel, Fielden wrote. They also reconfigured their facilities to produce more diesel, a sought-after product in many foreign countries.
But domestic gasoline demand began swelling again in 2013 as the U.S. economy recovered and then rapidly expanded a year ago as crude prices began to slide, pulling down gasoline pries too, Fielden wrote.
Low-cost crude and higher-priced gasoline have been a boon for refiners which have been running hard to take advantage of the healthy margins, which spiked as high as $25 per barrel in April, according to RBN.
This summer, refiners are cranking out 500,000 additional barrels per day of gasoline than they were a year ago, fueling a debate about whether increased refining runs will soak up the tide of oil being added to the nation’s storage tanks or whether crude and gasoline inventories will overflow in the fall when demand diminishes again.
Read the full article here: http://blog.mysanantonio.com/atlarge/2015/07/2-gasoline-on-the-way-but-not-until-the-fall/
