BAKU, Azerbaijan, May 25. Seasonal natural gas storage injections lift global inventories off historic April lows, Trend reports with reference to the US JP Morgan Bank.
“Tradeable commodity inventories (ex. China) increased in May to 51 days of use, up from the historical April low of 48.5 days of use. The inventory bounce is directly attributable to a seasonal increase in US natural gas storage, with largely unchanged inventories elsewhere. Despite increasing this month, tradeable commodity stocks remain critically low (~1.1z below average), and the abundance of available inventories in leading commodity consumer and importer China remains sizable,” JP Morgan said in its latest report.
The Bank notes that China currently holds an estimated 80 percent of global copper, 68 percent of corn, 49 percent of wheat, 36 percent of soybeans, 25 percent of oil, and 24 percent of aluminum inventories, according to our sources (Global Commodities, May 20).
“US gasoline prices to break above US$6. The national average US retail gasoline price topped US$4.50 a gallon for the first time this week. That’s up about 50 cents from a month ago, and a massive jump from US$3.04 per gallon on the same day in 2021. With expectations of strong driving demand, US retail price could surge another 37 percent by August to a US$6.20/gal national average. As peak US summer driving season begins, diesel is taking a back seat to gasoline. Toward the end of April, as the May NYMEX diesel contract climbed into expiry, US diesel prices peaked at a $1.63/gal premium to US gasoline, the highest diesel premium ever,” the report says.
JP Morgan estimates that over the following two weeks, US gasoline prices climbed to close that gap and today gasoline is trading at a 15 cents per gallon premium to diesel.
“Typically, refiners produce more gasoline ahead of the summer road-trip season, building up inventories. But this year, since mid-April, US gasoline inventories have fallen counter seasonally and today sit at the lowest seasonal levels since 2019. Gasoline balances on the East Coast have been even tighter, drawing to their lowest levels since 2011,” said the Bank.
---
Follow the author on Twitter: @Lyaman_Zeyn