Gasoline belatedly takes role of summer oil driver

LONDON/NEW YORK (Reuters) – Investors have been slow to make their seasonal move into gasoline ahead of the U.S. driving season, but now have helped to push oil to six-month highs and are likely to keep providing modest price support.

Economic downturn and the credit crunch had warded off the investors that typically bet on a summer upsurge in gasoline use in the world’s biggest fuel burner.

U.S. demand is still lagging year-ago levels, although cheaper fuel prices are expected to provide a spur and consumption of gasoline has been higher than that of other refined products.

Countries such as China, where economic growth has remained positive, and Iran, which lacks its own refining capacity, have also provided support, analysts said.

“It is still difficult to call it a strong market. But at least the gasoline market is balanced or getting close to being balanced,” said Oliver Jakob of Petromatrix.

Reuters