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Key Price Drivers for Crude Oil Bulls and Bears

PART:
1 2 3 4 5
Part 4
Key Price Drivers for Crude Oil Bulls and Bears PART 4 OF 5

Is US Gasoline Demand Bullish for Oil Traders?

US gasoline demand 

The EIA (U.S. Energy Information Administration) estimated that four-week average US gasoline demand rose by 33,000 bpd (barrels per day) to 9,248,000 bpd between April 28, 2017, and May 5, 2017. US gasoline demand rose 0.4% week-over-week, but fell 2.4% year-over-year.

The rise in gasoline demand is bullish for gasoline and crude oil (SCO) (BNO) (PXI) prices. For more on crude oil prices, read Part 1 and Part 2 of this series.

Is US Gasoline Demand Bullish for Oil Traders?

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Higher gasoline and crude oil (XOP) (USO) (VDE) prices have a positive impact on refiners and oil producers’ earnings like Western Refining (WNR), Marathon Petroleum (MPC), Stone Energy (SGY), and Triangle Petroleum (TPLM).

Gasoline prices  

US gasoline prices hit $1.14 per gallon on March 15, 2016—the lowest price in 12 years. As of May 16, 2017, prices have risen 40.4% from their lows in March 2016 due to the increase in gasoline demand. Rising gasoline demand partially supported crude oil prices as well. US crude oil prices have risen ~82.5% during the same period. Changes in gasoline demand drive gasoline inventories. For updates on gasoline inventories, read the previous part of the series.

US gasoline consumption estimates for 2017  

The EIA estimates that US gasoline consumption will average 9,330,000 bpd 2017. US gasoline consumption averaged 9,330,000 bpd and 9,180,000 bpd in 2016 and 2015, respectively. US gasoline consumption hit a record in 2016. High gasoline consumption in 2017 could support gasoline and crude oil prices.

In the last part of this series, we’ll take a look at China’s crude oil imports and demand.

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