For the week ending November 13, the Department of Energy's Energy Information Administration reported that gasoline stocks fell by 1.76 million barrels. This narrowed the gasoline surplus to last year to 10.6 million barrels and narrowed the surplus to the five-year average to 9.7 million barrels. 

Much of the decrease in gasoline stocks is attributed to a decline in gasoline imports, which fell to 584,000 bpd—putting this week's gasoline imports in the bottom 0.3 percentile of imports over the last five years. This matched the second lowest imports (that occurred on Nov. 25, 2005) and is in the lowest three weeks over the last five years. In addition, an increase in gasoline disappearance back to just over 9 million bpd tightened the gasoline stocks situation. Even though gasoline production nudged higher last week, with refinery utilization now 5.5 percent below a year ago and 8.7 percent below the five-year average, the potential is for gasoline production to slip as refiners focus more efforts on heating oil during the winter heating season. 

If gasoline production slips at the same time that the economy improves and gasoline disappearance picks up, this would result in a further tightening of gasoline stocks. This would be expected to be long-term supportive to RBOB futures and would place further emphasis on the need for increased domestic renewable fuel production.