US gasoline inventories climbed 2.2 million barrels last week to 230.94 million barrels despite a drop in production, suggesting lower demand, data released by the Energy Information Administration showed Thursday.  While inventories drew on the US Atlantic Coast, home of the New York delivery point for the NYMEX RBOB contract, stocks were higher in the rest of the country.

USAC gasoline inventories fell 527,000 barrels to 63.22 million barrels, roughly 1.4% below the five-year average.  USGC stocks climbed 1.25 million barrels to 84.71 million barrels, pushing the surplus to the five-year average to 8.5% from 6.5% the prior week.

US refiners upped crude runs by 189,000 b/d to 16.77 million b/d last week, the EIA data showed. However, US gasoline production edged lower by 20,000 b/d to 9.86 million b/d, with output of jet fuel climbing.  Imports of gasoline fell 263,000 b/d to 1.35 million b/d, but exports climbed 301,000 b/d to 717,000 b/d.  The result was a decline in product supplied, or implied demand, for gasoline of 35,000 b/d to 9.39 million b/d.

While the decline was not steep, the market had been looking for demand to pick up heading into the US Memorial Day weekend.  Thus the US stock build and slip in implied demand could have been perceived as especially bearish considering the current lack of fresh bullish headlines.  The petroleum complex has been fixed on the potentially destructive impacts on refined products demand from the ongoing trade war between the US and China.

Singapore gasoline crack spreads have plunged below the $1/b level for the first time since February, on growing supply from China. Chinese refiners were heard to be increasing exports in response to slower domestic demand growth and an increased export quota.  Evidence of the former was seen Wednesday, when the latest data from China’s National Development and Reform Commission showed domestic consumption of gasoline growing 3.2% on year, the slowest growth since April 2018.

Global trade volume is expected to contract this year for the first time since 2009, according to Platts Analytics.