US refiners have switched to making summer-grade gasoline earlier than usual as profit margins to make the fuel have improved compared with those for the spring months, market sources said.
Summer-grade gasoline is more expensive to make than gasoline for the spring, but stronger margins for contracts expiring in June and July promoted refiners to switch to the summer grade a few weeks earlier than usual.
Refiners briefly produce a transition-grade fuel during the spring but usually shift to summer-grade gasoline by late March ahead of the required May 1 date.
This year, the switch has already happened, traders said.
Gasoline margins for April fell to their lowest since 2010 seasonally at $19.41 a barrel, before recovering marginally. Gasoline margins for July rose to a high of $20.16 a barrel.
The US Environmental Protection Agency requires gasoline produced for warmer months to carry a lower Reid Vapor Pressure (RVP), a common measure of the volatility of gasoline.