The EIA (U.S. Energy Information Administration) reported that US gasoline inventories fell by 2.6 MMbbls (million barrels) to 256.4 MMbbls between February 10 and February 17, 2017. US gasoline inventories hit 259.1 MMbbls for the week ending February 10, 2017, the highest level ever.
A market survey estimated that US gasoline inventories would fall by 0.8 MMbbls between February 10 and February 17, 2017. A larger-than-expected fall in gasoline inventories supported gasoline prices on February 23, 2017. Bullish momentum in crude oil (IEZ) (UCO) (ERY) (IXC) prices also supported gasoline prices on February 23, 2017. Volatility in gasoline and crude oil prices impact the profitability of oil producers and refiners like Western Refining (WNR), Valero (VLO), and Bonanza Creek Energy (BCEI). For more on crude oil and gasoline prices, read part one and part five of this series.
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US gasoline production rose by 479,000 bpd (barrels per day) to 9,429,000 bpd between February 10 and February 17, 2017. Production rose 5.4% week-over-week but fell 5.7% year-over-year. US gasoline imports fell by 237,000 bpd to 367,000 bpd during the same period. Gasoline demand rose by 230,000 bpd to 8,663,000 bpd.
For the week ending February 17, 2017, US gasoline inventories are in the upper end of the five-year range. Near-record 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 Northern Tier Energy (NTI), Stone Energy (SGY), Tesoro (TSO), and Phillips 66 (PSX).
In the next part of this series, we’ll take a look at US distillate inventories.