(John Kemp is a Reuters market analyst. The views expressed are
* Chart 1: tmsnrt.rs/2c95iIO
* Chart 2: tmsnrt.rs/2c5IqaR
* Chart 3: tmsnrt.rs/2c5Jz2f
By John Kemp
LONDON, Sept 5 U.S. gasoline stockpiles remain
at record highs for the time of year but excess inventory is
smaller than it appears once adjusted for the higher level of
domestic consumption and exports.
Stocks of gasoline and blending components stood at 232
million barrels near the end of August, down from a high of 259
million in February but well above the 214 million reported at
the same point in 2015.
Persistently high levels of gasoline inventories have led
many analysts to warn about a "gasoline glut" that could force
significant cutbacks in refinery crude demand in the autumn
weighing on oil prices (tmsnrt.rs/2c95iIO).
But stockpiles look more reasonable when compared with the
record level of gasoline consumption at home and strong exports
to Mexico and the rest of Latin America.
Gasoline stockpiles exhibit strong seasonality and tend to
be highest relative to consumption in winter and lowest in
Refiners use storage to optimise capacity utilisation and
smooth the swing from off-peak to peak demand between winter and
Gasoline stocks started the year at more than 30 days worth
of consumption in January, the highest level since January 1999.
By the end of June, stocks had fallen to just 25.1 days of
consumption, compared with an average of around 23.7 days over
the previous five years (tmsnrt.rs/2c5Jz2f).
Once adjusted for the increase in consumption, the
difference between actual gasoline stocks and the level over the
previous five years was around 13 million barrels.
Since then, gasoline stocks have fallen further to 24.4 days
of consumption at the end of August, according to the new weekly
consumption estimates published by the U.S. Energy Information
Gasoline stocks were still around 13 million barrels higher
than normal for the time of year once adjusted for increased
But U.S. refiners have succeeded in controlling stockpiles,
mostly by holding refinery run rates unchanged from last year,
or even cutting them, and letting strong consumption and exports
to soak up the excess.
Thirteen million barrels is a rather modest "glut" and
should be relatively easy for the market to carry and for
refiners to work down in the year ahead.
Refinery crude processing rates are expected to be slightly
lower during the winter of 2016/17 than they were during winter
2015/16, but the difference is likely to be fairly small.
The negative impact on crude demand and prices is likely to
be minor, given the enormous scale of the global market.
The impact on distillate supplies, a co-product of gasoline
making, and a much smaller market, could be more significant, as
lower gasoline production implies a reduction in distillate
(Editing by Susan Thomas)