Publications: Notes at the Margin

The Global Gasoline Surplus (June 10, 2019)


Today, a global gasoline surplus is developing. Prices have declined. The problem is China. Gasoline consumption there seems to have stopped increasing and may have declined. At the same time, new independently owned refineries are coming on stream, producing more gasoline. A downward price spiral began in early May as more supply was pushed into Asian markets.


Whether the spiral continues will depend on the willingness of other refiners to cut runs. There are signs that they may be reacting. However, there is a real risk that overproduction from the new refineries in China will overwhelm the market unless the Chinese government limits gasoline exports. One should not expect this, though, given the government’s mercantilistic tendencies. As a large importer of crude oil, China has little reason to help oil producers get higher prices.


To receive the full report along with futures issues of Notes at the Margin and/or The Petroleum Economics Monthly, please Contact Us or send us an Information Request for subscription information.