A surge in travel for the US Thanksgiving holiday could increase driving demand and stretch already-thin gasoline stockpiles in the country.
US gasoline prices may increase in the coming weeks as holiday travel spikes demand while national inventories hover at a 10-year low. 81.8mn travelers are estimated to be traveling at least 50 miles from their homes between 25 November and 1 December, according to data released by automobile association AAA on Monday. That would be an increase of 2.1pc on the year.
The partial shutdown of the US federal government, which went on for 44 days from 1 October to 12 November, could shift more travel to cars as opposed to flights because of an increase in flight cancellations. This results in higher demand, which has recently lagged last year's levels.
US Gulf coast Colonial pipeline CBOB prices have averaged $1.87/USG, marking an 11¢/USG decrease from the average a year prior. Chicago's West Shore/Badger CBOB prices have also been trending lower averaging $1.88/USG during the same period, a 1¢/USG decline. US Atlantic coast RBOB was the sole area to post increases at $2.09/USG, up by 6¢/USG from the average a year earlier.
Most of those travelers will be driving with 89pc expected to travel by car, according to AAA. The AAA forecast would put an additional 1.3mn drivers on the road compared to last Thanksgiving, which would mark a 1.8pc increase on the year. Flights also had an increase with 6mn passengers expected to fly domestically, marking a 2pc rise from 2024. The number of flights could shrink due to the amount of cancellations that have occurred as of late, according to AAA.
US gasoline stockpiles have been particularly thin this year with the most recent data from the US Energy Information Administration (EIA) showing total gasoline stockpiles at 205.1mn bl in the week ended 7 November, the lowest level since the week ended 14 November in 2014. Stockpiles fell by 0.9pc on the year.
Some regions may be particularly impacted, with US midcontinent gasoline in the week ended 31 October falling to its lowest level on record.
The four-week average of US gasoline finished gasoline product supplied, a proxy for demand, was 8.82mn bl, down by 6pc on the year according to EIA data.
US flight cancellations remained high, but have eased since the reopening of the government.
National flight cancellations — caused largely by a shortage of air traffic controllers — on 12 and 13 November still hovered near 1,000 but marked roughly a 50pc decrease compared to average cancellations since restrictions went into place on 7 November, according to data from flight-tracking service FlightAware.
