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Fuel Prices Rise on Refinery Outages, Signaling Demand Recovery

Published 06/16/2020, 05:23 AM
Updated 06/16/2020, 06:36 AM
© Reuters.

(Bloomberg) -- In a sign that U.S. fuel demand is improving, gasoline futures are once again responding to subtle changes in supply.

Houston gasoline on Monday climbed to a three-month high after Motiva Enterprises LLC shut a key gasoline-making unit at the largest U.S. refinery, in Port Arthur, Texas. Earlier, New York gasoline rose to the highest since February after an issue at Phillips 66’s plant in Bayway, New Jersey, affected output there.

The price moves signal that fuel markets are rebounding from the depths of pandemic-led demand destruction. A few weeks ago, collapsing consumption outweighed supply disruptions. Now, diesel and jet fuel are climbing, and refinery profit margins have been rising. Yet, the buzz in the markets soon peter out on fears of a second wave of the coronavirus in parts of the U.S., and additional travel restrictions.

©2020 Bloomberg L.P.

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