Gasoline supplies are slowly rebuilding, though not as much as expected given that refinery output is gradually increasing. Spare capacity on the market is considered extremely tight by many analysts, and demand for gasoline is still considered to be strong even though it�s the off-peak demand season and prices remain relatively high. In the coming months, weather and inventory tightness will influence the market prices of refined fuels, most notably distillates (furnace/stove oil and diesel). Distillates have experienced a persistent decline in inventories and are at the bottom end of the average range for a high usage period along the northeastern seaboard (where nearly 80 per cent of heating fuel is consumed).

While recent fuel-pricing activity on the commodity markets has been largely impacted by supply/demand issues, geopolitical events including ongoing hostilities in the Middle East and, more recently, the escalation of civil unrest in Pakistan are other factors contributing to price volatility in the commodity markets. As well, robust economic growth in China and India will continue to play a role in a tightening global fuel market.