• US gasoline futures surged over 5% to trade at levels not seen since 2022, driven by tightening supply and seasonal demand.
  • The rally comes as refinery maintenance and geopolitical risks curb output, while inventories have drawn down sharply.
  • Traders are bracing for further volatility ahead of the summer driving season.

Surge in Gasoline Prices

US gasoline futures extended their rally on Thursday, jumping more than 5% to hit the highest level since 2022, according to market data. The move was fueled by a combination of factors, including lower refinery utilization rates and a decline in gasoline stockpiles.

“The market is reacting to a perfect storm of supply constraints and robust demand,” said a trader at a New York-based hedge fund, declining to be named. “We’re seeing tighter conditions than expected.”

The latest spike comes after the Energy Information Administration reported a larger-than-anticipated draw in gasoline inventories last week, with stocks falling by 3.2 million barrels. Analysts had expected a draw of just 1.5 million barrels.

Refinery output has been hampered by seasonal maintenance and unplanned outages, with utilization rates slipping to 86.2% from 88.1% the previous week. At the same time, geopolitical tensions continue to cast a shadow over crude supply, providing further support for gasoline prices.

“The combination of strong demand ahead of summer and limited supply is a recipe for higher prices,” noted an analyst at a commodities research firm. “If inventories continue to shrink, we could see further upside.”

Broader Market Impact

The rally in gasoline futures has also lifted other refined products, with diesel and jet fuel prices rising in tandem. The move has raised concerns about inflationary pressures, as higher fuel costs could spill over into consumer goods and transportation.

“Higher gasoline prices act like a tax on consumers,” said an economist at a major bank. “If this trend persists, it could weigh on spending and complicate the Fed’s inflation fight.”

Meanwhile, shares of refiners have rallied on the back of wider profit margins. Marathon Petroleum Corp. rose 3.2%, while Phillips 66 (PSX) gained 2.7%. “Refiners are benefiting from the squeeze in supply,” said an equity analyst.

Looking Ahead

Market participants will be closely watching next week’s EIA report for signs of any easing in inventory drawdowns. Additionally, any developments in U.S.-Iran tensions or OPEC+ output policy could add further volatility.

“The path of least resistance seems to be higher for now,” the trader said. “But a sudden shift in supply or demand could quickly reverse gains.”

Correction: An earlier version of this article misstated the percentage gain. The futures are up over 5%, not 6%.