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Will Crude Oil Prices Fall by $10 per Barrel from Current Levels?

PART:
1 2 3 4 5 6 7
Part 4
Will Crude Oil Prices Fall by $10 per Barrel from Current Levels? PART 4 OF 7

Gasoline Inventories Are above the 5-Year Average

API’s gasoline inventories 

The API (American Petroleum Institute) released its weekly inventory report on February 14, 2017. It estimated that US gasoline inventories rose by 0.7 MMbbls (million barrels) from February 3–10, 2017. US distillate inventories also rose by 1.5 MMbbls during the same period.

A market survey estimates that US gasoline inventories could have fallen by 0.8 MMbbls from February 3–10, 2017. US distillate inventories could have fallen by 0.7 MMbbls during the same period.

Changes in refined product inventories also impact crude oil (IEZ) (RYE) (SCO) (PXI) prices. A larger-than-expected fall in gasoline and distillate inventories is bullish for gasoline prices. When gasoline prices rise, they can impact refiners’ crude oil demand, which in turn supports crude oil prices. For more on crude oil prices and its drivers, read Part 1 of this series. 

Gasoline Inventories Are above the 5-Year Average

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Moves in gasoline and crude oil prices could impact refiners and oil producers’ earnings like Tesoro (TSO), Valero (VLO), SM Energy (SM), Sanchez Energy (SN), and Bonanza Creek Energy (BCEI).

EIA’s gasoline inventories  

On February 15, 2017, the EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending February 10, 2017.

For the week ending February 3, 2017, the EIA reported that US gasoline inventories fell by 0.9 MMbbls (million barrels) to 256.2 MMbbls. US distillate inventories were flat at 170.7 MMbbls for the same period.

Impact  

A larger-than-expected fall in gasoline and distillate inventories could support gasoline and crude oil (DIG) (SCO) (BNO) prices. However, a rise in inventories could pressure gasoline and crude oil prices.

In the next part of this series, we’ll take a look at gasoline demand. We’ll discuss how it impacts gasoline and crude oil prices.

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