Gasoline rallied Monday as speculators looked for a demand boost as the Memorial Day holiday approaches, said Robert Yawger, executive director for energy futures at Mizuho, in a note.
U.S. gasoline storage of 218.3 million barrels, as reported by the Energy Information Administration, is 12.6 million below the nine-year low of 205.7 million barrels from Nov. 4, 2022, “implying to me that a storage situation will likely develop at some point in the relatively near term future,” he said, in a note.
The July gasoline crack spread was up 3.25% versus $34.29 and traded to a July contract high of $34.33 earlier in the session, he wrote. The crack spread is the difference between the price of a barrel of crude and the products that can be refined from it
Meanwhile, speaking at an economic forum in Doha, Saudi energy minister Prince Abdulaziz bin Salman on Tuesday warned short sellers could face another round of pain.
“Speculators, like in any market they are there to stay, I keep advising them that they will be ouching, they did ouch in April. I don’t have to show my cards, I’m not a poker player…but I would just tell them to watch out,” he said,
Saudi Arabia and its OPEC+ allies unexpectedly announced more than 1 million barrels in additional cuts in early April, sparking a spike higher in crude prices, though gains were washed away by the end of the month. The cuts took effect at the beginning of May.
A meeting of OPEC+ ministers is expected June 4 in Vienna.
