US Energy Information Administration data showed the change in US gasoline inventories at -1.684m for the week ending 25 September, compared with -1.686m in the prior period. The latest figure implies a slightly smaller weekly draw than previously recorded.
The movement represents a 0.002m difference from the preceding report. Stocks therefore continued to fall, but at a marginally slower pace, based on the EIA’s weekly measure.
Consecutive Weekly Draws Bolster Demand Narrative
We are seeing a consecutive weekly draw in US gasoline inventories, with the latest EIA data showing a decline of 1.684 million barrels for the week ending September 25. This back-to-back drawdown of over 1.6 million barrels signals that seasonal demand is holding up much stronger than market bears anticipated. As we transition into October, this unexpected supply tightness is keeping energy markets highly reactive.
Trading Strategy and Market Implications
Given this tight supply backdrop, we recommend derivative traders focus on long positions in RBOB gasoline futures or short-term bull call spreads. Historically, gasoline inventories decline at a slower rate in late September as refinery maintenance season begins. However, with US refinery utilization rates currently averaging around 88.6%, any further drop in capacity will likely squeeze supplies and push front-month contract prices higher in the coming weeks.
We should also monitor the gasoline crack spread, which measures the margin of refining crude into fuel. If refining margins expand due to these persistent draws, it will offer a strong buying signal for WTI crude oil futures as well. We advise managing risk closely with stop-losses just below recent support levels, as seasonal fuel transitions typically bring high market volatility.
