May WEX Fuel Index

Gasoline prices are at or near highs for the year to start the month of June with US averages hovering near the $2.35 per gallon level.

While fuel prices are moving higher at the start of the summer driving season, prices are still significantly lower than where they were at this time last year. Retail prices are running some 40 cents below where they were at this time last year and the recently completed Memorial Day holiday weekend saw the lowest US averages since 2005.

Gasoline demand by most measurements continues to point towards a record this year besting the previous highs of 2007. By EIA measurements, gasoline demand has been above 9 million barrels a day for the last 17 weeks (through the end of May). Besides EIA data, the Bureau of Economic Analysis recorded April demand growth and the most recent vehicle miles travelled data from the Department of Transportation for March 2016 showed a 5% increase versus the same month a year ago.

Even with the strong demand that is currently being seen this spring, inventories are considered to be on solid footing and refiners should be able to meet growing demand needs. There is still a solid year on year supply surplus for gasoline in the US, according to EIA data, that is now bigger than the distillate surplus which at times this past winter was very high.