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US Crude Inventories Push Prices to 15-Month High: What's Next?

PART:
1 2 3 4 5 6 7 8 9 10
Part 8
US Crude Inventories Push Prices to 15-Month High: What's Next? PART 8 OF 10

US Gasoline Inventories Rose for 4th Time in 6 Weeks

US gasoline inventories  

The EIA (U.S. Energy Information Administration) reported that US gasoline inventories rose 2.5 MMbbls (million barrels) to 228 MMbbls between October 7 and October 14, 2016.

Market surveys had estimated that US gasoline inventories would fall by 1.3 MMbbls for the same period. US gasoline prices were flat despite the surprise build in gasoline inventories on October 19. For more on gasoline and crude oil prices, please read part one and part seven of this series. US gasoline inventories rose for the fourth time in the last six weeks.

US Gasoline Inventories Rose for 4th Time in 6 Weeks

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Gasoline production, imports, and demand  

US gasoline production fell 437,000 bpd (barrels per day) to 9,498,000 bpd between October 7 and October 14, 2016. Production fell 4.4% week-over-week. US gasoline imports rose 109,000 bpd to 871,000 bpd for the same period. Gasoline demand fell by 466,000 bpd to 8,798,000 bpd in the same period.

Impact of gasoline inventories  

For the week ending October 14, 2016, US gasoline inventories were 4% higher than in the same period in 2015. They’re also higher than the upper range for the last five years. High gasoline inventories could pressure gasoline and crude oil prices.

Lower gasoline and crude oil prices could have a negative impact on the profitability of oil producers and refiners like Swift Energy (SFY), Valero Energy (VLO), Tesoro (TSO), Synergy Resources (SYRG), Range Resources (RRC), Bonanza Creek Energy (BCEI), and Northern Tier Energy (NTI).

Crude oil prices also impact funds such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the United States Gasoline Fund (UGA), the PowerShares DWA Energy Momentum (PXI), the Fidelity MSCI Energy (FENY), and the VelocityShares 3x Long Crude Oil ETN (UWTI).

In the next part of this series, we’ll take a look at US diesel fuel prices.

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