Key Highlights

  • Gasoline futures fell 6.90% to USD 2.7329 a gallon, near a four-month low.
  • Marathon Petroleum fell 10.46% and Valero 9.65% as refiners sold off.
  • Trump said he has no immediate plans to strike Iran after the midterms.
  • The EIA reported a 222,000-barrel gasoline draw for the week ended Oct. 30.

US gasoline futures fell USD 0.203, or 6.90%, to USD 2.7329 per gallon on Wednesday, Nov. 4, holding close to a four-month low. Markets weighed diplomatic efforts between Washington and Tehran against persistently tight supplies.

The decline extends a monthly drop of 16.02%. Gasoline is still up 42.57% over the past year and trades about 27% below a May peak near USD 3.75. The data provider's Q4 forecast of USD 3.2359 sits above the current quote. The contract traded near USD 1.7 in January and February, climbed sharply from March, and has stayed in a USD 2.8 to USD 3.6 band since, with the current price at the bottom of that band.

Diplomacy Eases Hormuz Concerns

Ongoing negotiations helped ease concerns over disruptions to the Strait of Hormuz, with flows reportedly nearing normal levels. President Donald Trump said he has no immediate plans to strike Iran following a Democratic sweep in the US midterm elections, and the political outcome could complicate the President's foreign policy.

Inventories Stay Tight

Energy Information Administration figures showed a 222,000-barrel draw in US gasoline inventories in the week ending Oct. 30, a sign that stocks remain thin even as futures slide. Energy Secretary Wright said the administration is working with refiners to boost output and restart idled facilities. He added that prices peaked in September and that he sees them declining further.

Two seasonal factors cap how much Supply can rise. Refinery maintenance is under way, and a shift toward diesel production ahead of winter could constrain gasoline output.

Refiners Sell Off After Record Quarters

Refining shares fell about 10% in Wednesday trading, even as the broader market rallied and the energy sector ETF dropped sharply.

Marathon Petroleum (NYSE:MPC) fell 10.46% to USD 382.64 from a prior close of USD 427.34, for a Market Value of USD 107.45 billion. The move followed a record third quarter with adjusted Earnings of USD 26.93 per share, a beat, and 100% utilization. The company also raised its Dividend 10%, authorized a new USD 5 billion buyback and agreed to sell its St. Paul Park and Mandan refineries to CVR Energy (NYSE:CVI) for USD 4.2 billion. Management sees elevated margins continuing through at least mid-2027.

Valero (NYSE:VLO) dropped 9.65% to USD 350.24 from USD 387.65, for a market value of USD 97.68 billion. Third-quarter earnings of USD 23.90 per share topped the USD 21.17 consensus, and the company announced a USD 10 billion buyback authorization and a USD 320.5 million deal for LyondellBasell's former Houston refinery site. Shares had already pulled back about 10% over the prior week.

Phillips 66 (NYSE:PSX) also reported record margins. The sell-off came on the same day WTI crude fell 8.74%.

Pump Price Markers

Four items frame the next stretch. Diplomatic headlines on Hormuz flows show whether the war-risk premium keeps unwinding. The next weekly EIA report shows whether gasoline stocks keep drawing after the 222,000-barrel decline. Refinery restarts show how quickly output responds to the administration's push. The four-month low near USD 2.73 serves as the price marker, with the data provider's USD 3.2359 Q4 forecast about 18% higher.