A summer of road trips powered by premium gasoline is about to get more affordable.
Gasoline makers in the U.S. are stocking up on ingredients that boost the octane rating in fuel, diminishing chances for a repeat of last year’s record spread for premium-grade gasoline. Luxury cars often require high-octane fuel to bolster performance and reduce knocking.
U.S. imports of alkylate and reformate—the main octane-boosting blendstocks—have reached 147,000 barrels a day so far this month, the second highest in records going back to 2017, according to data from Kpler. Most of the shipments are coming from Asia, including India and Taiwan, which have been pushing exports to the U.S. and Caribbean storage sites after a slower-than-expected rebound in Chinese energy demand.
At the same time, demand for those blendstocks is easing because less naphtha is expected to flow into the U.S. gasoline pool, meaning lowered need for octane boosters, said Alan Gelder, VP of refining, chemicals and oil markets at Wood Mackenzie. Petrochemical companies in Asia are churning through more naphtha than a year ago, and that’s likely to erode the oversupply of the feedstock this summer, according to Gelder.
As with regular gasoline, premium-fuel costs will track the vicissitudes of oil prices, which are expected to stay below 2022 levels due to ample production and lagging economies. And that’s good for drivers, no matter which grade they pump.
This article was provided by Bloomberg News.