U.S. gasoline falls to 3-year low at end of driving season, oil falls By Reuters

By Shariq Khan

NEW YORK (Reuters) – U.S. gasoline futures fell nearly 6 percent on Tuesday to their lowest level since December 2021, as the end of the driving season hurt demand for the fuel amid a selloff in the broader oil market.

Gasoline futures for October delivery fell 5.5 percent to $1.98 a gallon, the biggest single-session losses since July 2022.

The fuel was the biggest decliner amid a broader energy market selloff on Tuesday as the end of the domestic summer season and ample inventories put additional pressure on gasoline, Rabobank strategist Joe DeLaura said.

The Labor Day holiday, celebrated on the first Monday in September, is considered the end of the summer driving season in the United States.

Meanwhile, oil futures fell 4.4 percent to $70.34 a barrel on Tuesday, the lowest settlement since December 2023.

The resolution of disputes that led to lower Libyan oil production and exports eased supply constraints, while weak production data from China reignited concerns about weak demand in the top oil-importing nation. (OR)

The sharp drop in oil prices could push retail gasoline to its lowest level since 2021 by the end of October, Gasbuddy analyst Patrick De Haan posted on social media.

The cost of crude oil is the largest component of the cost of gasoline at the pump, according to the US Energy Information Administration.

At the US Gulf Coast refinery, gasoline was trading close to below $2 a barrel and technical factors suggest more downside ahead, fuel distributor TACenergy said in a note.

“The driving season has ended as energy markets begin trading in September with a strong selloff in gasoline prices,” they said.

Gasoline futures for most immediate delivery were at their lowest premium for the next June contract. Higher future prices are a signal for traders to stock more products instead of selling at low prices.

U.S. gasoline inventories stood at 218.4 million barrels as of Aug. 23, up 0.5 percent from a year ago.