MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for September 23^rd

Updated at 5:00 PM ET 

HEADLINES:

— API: Crude, Gasoline Stocks Fell, Distillates Rose Last Week

— EPA Fines California Pipeline Company Over Gasoline Spill 

— Plentiful Supply to Limit Fed Cut’s Effect on Oil

— EIA: US Diesel Prices Edge Up 1.0cts on Week

— EIA: Gulf Coast Gasoline Falls 5.8cts

NEWS:

API: Crude, Gasoline Stocks Fell, Distillates Rose Last Week

The American Petroleum Institute on Tuesday (9/23) reported a draw in U.S. crude and gasoline inventories for the week ended September 19, while citing a build in distillate fuel stocks.

API reported that U.S. commercial crude oil supply fell by 3.82 million bbl last week, while inventories at Cushing, Oklahoma, the delivery point for NYMEX West Texas Intermediate futures, rose by 72,000 bbl.

Gasoline inventories dropped by 1.05 million bbl in the week ending September 19, reversing the prior week’s increase. Distillate fuel stocks rose by 1.91 million bbl for the week.

EPA Fines California Pipeline Company Over Gasoline Spill 

The U.S. Environmental Protection Agency (EPA) has fined SFPP, L.P. $213,560 after more than 40,000 gallons of gasoline spilled from one of its pipelines in Walnut Creek, California, the agency said in a statement Tuesday (9/23). 

The spill violated the Clean Water Act, which requires petroleum transporters to properly maintain and operate pipelines to prevent discharges.
“Pipeline operators must be held accountable when they discharge gasoline into our environment,” said Amy Miller, EPA Pacific Southwest Region Enforcement and Compliance Assurance director.
SFPP is continuing cleanup work with the Regional Water Quality Control Board to address environmental impacts from the spill.

Plentiful Supply to Limit Fed Cut’s Effect on Oil

The Federal Reserve’s inaugural 2025 rate cut of 25 basis points — and more reductions planned to support a struggling US labor market – might not do much for the economy nor oil market.

While monetary loosening is typically a boon to demand, the Fed’s easing could unleash a surfeit of new long-dated bonds demanding higher yields that create more inflation in the long run, resulting in a self-defeating outcome for rate cuts.  

The dollar’s impact on oil prices is a separate topic, but the bond yield element provides a critical counter-narrative as higher long-term cost of capital puts more strain on energy companies.

The dollar itself has barely moved the way currency traders had expected after the rate cut. The Dollar Index – a basket that measures the U.S. currency against a basket of six others – traded at 97.42 on Tuesday (9/23) – up decisively from 96.63 level it was at a day prior to the September 17 Fed decision.

Further diluting the impact of the Fed move is the measured pace of cuts strategized by its chairman Jerome Powell – a wise decision in the face of unknown inflation threats but unhelpful to an economy reeling from stunted growth and heavy tariffs on U.S. trading partners.

Even under the best-case scenario, a boost to economic activity will not translate into an equivalent increase in oil demand, given rises in engine efficiency gains, continuing fleet electrification and the growing market share of biofuels.

In fact, while Americans are traveling more than ever, transportation fuel demand has still not caught up to pre-pandemic levels.

In July, vehicle miles traveled set a record just shy of 296 billion. Seasonally adjusted, they were up 1.6% year-on-year and up 0.5% from June.

Gasoline demand, in contrast, continued to lag pre-pandemic averages. In June, the latest month for which the U.S. Energy Information Administration (EIA) has complete data, finished motor gasoline supplied averaged 17.21 million bpd, 3.9% lower than in the same month in 2019.

A similar scenario played out in air transportation, where, despite a record number of travelers, jet fuel demand was reeling from efficiency gains, staying below pre-pandemic levels. Jet fuel consumption in 2024 was down 3% from 2019 levels, even after the second quarter of last year had drawn level with the same period of 2019.

Increased industrial and freight activity is typically supportive of diesel demand, but biofuels and efficiency gains have dented demand for petroleum distillate fuel oil.

Even when including renewable fuels and biodiesel, which have tripled their market share since the pandemic, total distillate fuel oil consumption was still about 1% behind 2019 levels, according to EIA.

In conclusion, the Fed’s opening rate cut of 25 basis points for 2025 and plans for measured reductions going forth may do little to weaken the dollar while allowing inflation to remain high enough to dampen energy sector growth and consumer demand for oil.

EIA: US Diesel Prices Edge Up 1.0cts on Week

 The national average price for retail diesel fuel increased slightly as of Monday (9/22), ending a two-week decline, according to the latest data from the Energy Information Administration.

The national average for retail diesel fuel rose by 1.0cts to $3.749 gallon. That was still 21.0cts above the pricing from the same week of last year.

East Coast PADD 1 registered the steepest regional move, slipping by 0.3cts to $3.745 gallon as of September 22. It remained 16.8cts higher compared to last year.

Midwest PADD 2 prices gained by 2.1cts to $3.731 gallon, staying 22.0cts above 2024 levels.

Gulf Coast PADD 3 prices edged up by 1.1cts to $3.400 gallon, 20.9cts higher compared to last year.

West Coast PADD 5 diesel inched up by 0.1cts to $4.524 gallon, fetching 28.5cts above the same period of the prior year. Meanwhile, West Coast less California slipped by 1.1cts to $4.123 gallon, though it remained up by 30.8cts compared to last year. California rose by 1.4cts to $4.985 gallon, priced 25.8cts higher compared to last year.

Rocky Mountain PADD 4 climbed by 2.5cts to $3.747 gallon, while showing an increase of 13.9cts compared to the same period of last year.

EIA: Gulf Coast Gasoline Falls 5.8cts

The national average price of retail regular gasoline inched higher Monday (9/22), supported by gains in the Midwest and East Coast despite Gulf Coast seeing a sharp fall, latest data from the Energy Information Administration showed.
The national average for retail regular gasoline increased by 0.5cts to $3.173 gallon, 1.2cts below the same week in 2024.3.1
The Midwest PADD 2 average rose by 2.7cts to $3.008 gallon, though still 6.9cts under last year.
The East Coast PADD 1 price increased by 1.4cts to $3.030 gallon, or 2.2cts below the same period in 2024. Within the region, New England PADD 1A eased by 2.1cts to $3.075 gallon, cheaper by 0.3cts from last year. Central Atlantic PADD 1B was flat at $3.187 gallon, down 1.8cts from 2024, while the Lower Atlantic PADD 1C climbed by 3.1cts to $2.920 gallon, though 3.1cts below last year.
The Gulf Coast PADD 3 average fell by 5.8cts to $2.716 gallon, 1.7cts lower compared with 2024.
The Rocky Mountain PADD 4 price edged up 0.4cts to $3.184 gallon, though 25.0cts below last year’s level.
The West Coast PADD 5 slipped by 0.1cts to $4.272 gallon, or 16.1cts higher year on year. West Coast less California eased by 0.4cts to $4.059 gallon but was 36.2cts above the same week in 2024.