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Will US Crude Oil Production Offset Major Oil Producers' Deal?

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Part 5
Will US Crude Oil Production Offset Major Oil Producers' Deal? PART 5 OF 7

Gasoline Futures Hit 20-Month High

US gasoline futures  

Gasoline futures contracts for May delivery fell 0.9% to $1.74 per gallon on April 12, 2017. Prices fell despite the larger-than-expected fall in US gasoline inventories. We’ll look at gasoline inventories in the next part of this series.

Crude oil (UCO) (RYE) (IXC) (IEZ) and gasoline futures usually move together as you can see from the chart below. For more on crude oil prices, read part one of this series.

Gasoline Futures Hit 20-Month High

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Highs and lows  

On February 26, 2016, US gasoline active futures contracts hit a low of ~$1 per gallon, the lowest level in 12 years. Gasoline prices fell due to falling crude oil (XLE) (XOP) prices and strong gasoline production between 2014 and 2016, as you can see in the above chart. As of April 12, 2017, gasoline active futures have risen 74% from their lows in February 2016 due to the increase in gasoline demand and recovery in crude oil prices in early 2016.

Higher gasoline and crude oil (USO) (PXI) prices could have a positive impact on US refiners and oil producers such as Valero (VLO), Marathon Petroleum (MPC), Phillips 66 (PSX), SM Energy (SM), and Sanchez Energy (SN).

On April 12, 2017, prices hit $1.77 per gallon, the highest level since August 2015. In the next part of this series, we’ll take a look at US gasoline inventories and how they impact gasoline and oil prices.

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