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U.S. Gasoline Demand Is at Pre-Pandemic Levels. Don’t Cheer Yet

  • Inventory contraction comes with refineries at reduced rates
  • Refiners are forced to deal with a stubborn diesel glut
A customer wearing gloves returns a fuel nozzle at a gas station in Los Angeles, California.

A customer wearing gloves returns a fuel nozzle at a gas station in Los Angeles, California.

Photographer: Kyle Grillot/Bloomberg
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U.S. gasoline demand recovered to where it was before the pandemic closed much of the country, but it’s still well-below where it usually is in height of the summer driving season.

Stockpiles of the fuel declined by the most since mid-March last week, a bullish indicator for the oil market that has been hit by the coronavirus-driven demand collapse. But that comes with a caveat: Refineries are still running at just over 3/4 of their normal utilization rate, when typically they operate at nearly full capacity in the peak of the summer driving season.