The start of summer in the US traditionally marks the start of the driving season, a period of 

strong  gasoline  consumption for the US and a major driver of European exports. However, 

high imports from Europe since mid-March and high refinery utilization rates could put early 

pressure on the arbitrage window to the US. 

Having clocked up 1.58 trillion miles in the first half of 2017, US driving has been increasin

g for six straight years, according the US Department of Transportation's Federal Highway 

Administration. 

Due to restrictions applied by the Jones Act -- which require trade flows of oil and other goo

ds  between US ports to be carried by US-flagged, US-built and US-crewed ships -- the US 

Atlantic  Coast is largely relying on imports from abroad in the lead-up and during this high 

demand period. 

US  East  Coast  (PADD I)  gasoline  stocks increased by 1.84 million barrels to 63.9 million 

barrels in the week ending May 4, according to the Energy Information Administration (EIA). 

Stocks on the East Coast have been trending higher since late March, defying the overall 

trend  of  gasoline  inventories across the US moving lower. With the US heading into the 

summer driving season, the question is how much higher can inventories go before they st 

art affecting demand. 

US  gasoline  demand  is  currently  the  main  driver  of European  exports in what sources describe as an otherwise very quiet market. Gasoline flows from Northwest Europe schedul

ed to arrive in the US and on the east coast of Canada amount to around 1,274,000 mt so

 far in May, according to data Monday from S&P Global Platts trade flow software cFlow. 

While these overall volumes are in line with volumes seen in March and April, an increasing 

number of tankers on a trans-Atlantic journey in May are observed to be bound for dischar

ge in New York. 

While PADD I gasoline stocks have been rising ahead of the driving season and the switch 

to summer specification gasoline on May 1 for the past two years, they are doing so much 

earlier and stronger this year. 

PADD I stocks have risen by about 7.55 million barrels since mid-March whereas in the last 

two years stocks have only started to pick up in mid-April. However, it should be of note that 

East Coast stocks were comparatively lower than in the previous years prior to the increase 

starting March. 

Refinery utilization rates have risen again as well and stood at 94.9% in the week ending May 

4, 3.8% higher year on year and the highest recorded for May in the past three years, 

according to the latest EIA data.