What is Morgan Stanley's base case projection for US gasoline inventories by the end of August, and how does it compare historically?

Morgan Stanley's base case projection is that US gasoline inventories will fall to 198 million barrels by the end of August — a level lower than at any time in modern data and the lowest since October 2012, according to the Energy Information Administration. This would mark a record seasonal low, as inventories stood at 222 million barrels as of late April, the lowest for that time of year since 2014.

What are the main factors driving the decline in US gasoline inventories, according to Morgan Stanley?

The decline is driven by a collapse in gasoline imports into the East Coast — with traditional resupply from Europe and the Middle East effectively stopped, including absent cargoes from Saudi Arabia, Malaysia, and the ARA region — coupled with refiners prioritizing diesel and jet fuel production due to higher margins (linked to the effective closure of the Strait of Hormuz), sustained elevated US gasoline exports, and resilient domestic demand.

US Gasoline Supplies on Way to Seasonal Low, Morgan Stanley Says

May 5, 2026

Morgan Stanley forecasts US gasoline inventories to drop to record seasonal lows by late August due to import collapses and geopolitical tensions, warning of sustained market tightness and potential price hikes.

bloomberg

2026-05-05

US Gasoline Supplies on Way to Seasonal Low, Morgan Stanley Says

US Gasoline Supplies on Way to Seasonal Low, Morgan Stanley Says

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