- Motor fuel inventories rise 19 million barrels in two weeks
- Pump prices decline to lowest since 2009, weakening margins
Refineries are stocking gasoline at the fastest pace on record as weak U.S. demand reduces their profit margins.
Inventories of the fuel rose by 19 million barrels in the two weeks ended Jan. 8, the Energy Information Administration reported, the biggest increase for any two weeks since data started in 1990. Refinery margins dropped to a one-month low.
Demand for the fuel averaged 8.81 million barrels a day in the four weeks ended Jan. 8, the lowest level since March, according to the EIA. Meanwhile, refineries used 16.5 million barrels of crude and other liquids to produce fuels, the highest level for this time of the year in EIA data begun in 1989.
“Inventories can continue to grow,” said Andy Lipow, president of Lipow Oil Associates LLC, an energy consulting firm in Houston. “Gasoline demand is seasonally at the lowest level of the year. As we get to the end of February into March, demand will rise, and that will get inventories under control.”
Gasoline futures dropped 2.63 cents, or 2.4 percent, to $1.0585 a gallon on the New York Mercantile Exchange. They reached $1.0544, the lowest intraday level since February 2009. The crack spread, a rough measure of the profit from processing Brent oil into fuels, fell to $12.183 a barrel, heading for the lowest level since Dec. 15.
Regular gasoline at the pump averaged $1.946 a gallon nationwide yesterday, according to AAA. That’s also the lowest level since 2009.