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The US summer driving season has begun, leading to a surge in gasoline demand and tighter fuel supplies. With refineries operating at near full capacity and maintenance outages limiting production, gasoline inventories have fallen to seasonal lows. This has raised concerns about potential price spikes as drivers increase travel ahead of the July 4th holiday. The Energy Information Administration (EIA) reported a 2.1 million barrel drop in gasoline stocks last week, the largest decline in three months.
The tightening gasoline market is likely to support crude oil prices, as stronger fuel demand validates higher oil prices. Traders should monitor the spread between gasoline and crude oil, which has widened to a 5-week high. For the US energy sector, this seasonal demand boost could extend gains seen in WTI crude futures. However, risks remain if OPEC+ accelerates production cuts or US shale output rebounds faster than expected.
Key watchpoints include weekly EIA inventory reports, OPEC+ policy meetings, and US production data. Gulf investors with exposure to global oil markets should assess how sustained high gasoline prices might impact regional refining margins and energy exports. The situation also highlights the vulnerability of US fuel markets to supply disruptions during peak demand periods.
