After holding in a range of about 68 cents per gallon to 72 cents in the summer of 2002, gasoline prices began to move higher in the third quarter of 2002 approaching 90 cents. A hurricane in the Gulf of Mexico caused some disruptions which boosted prices while demand for gasoline remained strong. This was attributed to less use of airline travel and greater use of sport utility vehicles. This occurred in spite of the fact that the overall level of U.S. economic growth remained rather weak as seen in surveys of consumer sentiment. The major background factor supporting higher energy prices overall was the ongoing situation with Iraq and the likelihood of conflict which would hold out the possibility that there could be disruptions of crude oil supplies. While the potential for an armed conflict in Iraq looks fairly high, the timing of such an event remains unknown.

Another fundamental factor supporting higher gasoline prices was the fact that in the first nine months of 202, U.S. gasoline stocks declined at a time of strong demand. While a conflict in the Middle East would likely cause all energy prices to spike higher. Any rally should be short lived as other producers would likely step in and produce more crude oil and other energy products. On a seasonal basis, gasoline demand is strong in the summer driving period between Memorial Day and Labor Day. After Labor Day, demand begins to weaken. One offsetting change to this pattern would be if the U.S. economy started to show strong improvement. That would act to support gasoline demand.

The U.S. Energy Information Administration reported that U.S. finished motor gasoline production in September 2002 was 8.395 million barrels per day. A year earlier, production was 8.38 million barrels per day. In the January-September 2002 period, gasoline production averaged 8.45 million barrels. In the same period in 2001, production averaged 8.29 million barrels while in 2000 production averaged 8.17 million barrels.

U.S. imports of finished gasoline in September 2002 were 483,000 barrels per day, down 10 percent from the same month a year earlier. In the January-September 2002 period, daily imports of finished gasoline averaged 497,000 barrels. This was some 10 percent more than in the same period o 2001 when imports averaged 453,000 barrels. In 2000, imports in the same period averaged 425,000 barrels.

U.S. stocks of gasoline in the first nine months of 2002 declined an average of 13,000 barrels per day. In the January-September 2001 period, stocks increased by some 18,000 barrels per day. U.S. exports of gasoline in the first nine months of 2002 averaged 117,000 barrels per day. In the same period in 2001, exports averaged 125,000 barrels per day.

Total motor gasoline stocks at the end of September 2002 were 207 million barrels. A year earlier stocks of gasoline were 206 million barrels. At the end of January 2002, stocks were 222 million barrels.

Futures Markets

Unleaded gasoline futures and options are traded on the New York Mercantile Exchange (NYMEX).

Excerpted from the CRB Commodity Yearbook. For more information on CRB products click here

Related Links

Seasonal Chart