Where has the summer gone? And where did the summer gasoline season go? Those are the questions we want answers to!
The toluene market peaked in January and February of this year. March/April/May were the months for toluene to move higher on the traditional runup in gasoline prices as refiners prepared to produce low-RVP, summer grade gasoline. Instead, toluene barge pricing moved down by over $0.2100 per gallon in March, down another
$0.0600 per gallon in April, but moved up $0.0600 per gallon in May. The net effect was a down toluene market in an upward moving gasoline market. Over this period, we saw toluene spreads to RBOB gasoline move from $1.00 per gallon in January down to $0.5000 – $0.6000 per gallon over the course of April and May. It is odd to see the relative strength of toluene weaken to those spreads in peak gasoline season.
While the solvent-grade xylene market was somewhat undervalued in January/February, the xylene market also followed the downward price trend like toluene with the market moving down in the spring months. Early year xylene was trading well over $0.8000 per gallon over RBOB and briefly fell to below $0.4000 per gallon in mid-April before rebounding to spreads similar to toluene.
June marked the peak of the T&X market for summer with toluene barges averaging $2.8948 and xylene barges averaging $2.8763 per gallon. Both products moved down slightly in July and in August.
What happened then? The best answer we can give is that there was a big question about summer gasoline demand for 2025. More electric vehicles, a weak economy, uncertainty regarding tariffs all impacted on gasoline demand for this year. The US octane slate to make gasoline in 2025 was very balanced for the most part. Traders took a very conservative approach with toluene and xylene imports for 2025 due to the massive length in these products that were imported in 2024. This was a risk management play, and which turned out to be the right decision for this year’s gasoline blending season.
US gasoline inventories have been extremely low for most of 2025 with stocks consistently running 1% – 6% below the 5-year average. Thankfully, no major refinery outages or storms have impacted US refiners in a big way this year. We hope this remains the case for the rest of this year!
Tariffs on imports have significantly slowed both toluene and xylene shipments to the US Gulf Coast this year. With demand down for gasoline and demand down for solvent-usage, the US has successfully operated with low levels of many products.
While we have painted a lackluster picture for gasoline this year, refiners have been running at 95 – 96% of capacity for the past month to keep up with gasoline demand. It is a noticeably short season with an outlook for September for gasoline prices to go down.
We thank you for all your business! Please contact your TPG representative for more information.