14 December 2011 17:09 [Source: ICIS news]
HOUSTON (ICIS)--Gasoline futures tumbled about 7 cents/gal following news of a 3.8m bbl gain in motor gasoline inventories, said an analyst on Wednesday.
"The price drop is a combination of the [US Energy Information Administration (EIA)] report and a significant increase in gasoline supplies last week," said analyst Phil Flynn with PFGBest.An increase in production led to the jump in motor gasoline stockpiles for the week of 2 December.
Flynn said the production increase could be in preparation for the Christmas holiday,but "it's created the perfect storm for gasoline prices to go down."
Analyst Patrick DeHaan with GasBuddy.com said any change in price on Wednesday, when the inventory statistics are typically released, is usually a result of an increase or decrease in the stockpiles or change in demand or production data.
Gasoline inventories increased to 218.8m bbl, a 3.8m bbl jump, according to the EIA. This followed a 5.1m bbl hike for inventories the week prior.
Production of motor gasoline increased by 1.834m bbl, while demand for finished motor gasoline climbed by 644,000 bbl for the week of 2 December.
Motor gasoline production jumped despite a draw down in nationwide refinery utilisation, to 85.1% from 87.7% the prior week.
Imports of motor gasoline slipped by 308,000 bbl, however exports also were assessed lower at 3.661m bbl, down from 3.703m bbl the prior week.
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