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Crude Oil Market: Are the Bulls Overshadowing the Bears?

PART:
1 2 3 4 5
Part 3
Crude Oil Market: Are the Bulls Overshadowing the Bears? PART 3 OF 5

US Gasoline Demand Falls for 2nd Time in 5 Weeks

US gasoline demand 

The US Energy Information Administration estimates that weekly US gasoline demand fell 194,000 bpd (barrels per day) to 9.5 MMbpd (million barrels per day) between July 7, 2017, and July 14, 2017. Weekly gasoline demand fell 2% for the week ending July 14, 2017, compared to the previous week. Gasoline demand also fell 2% from the same period in 2016. Demand fell for the second time in five weeks. The fall in gasoline demand is bearish for gasoline and crude oil (IXC) (IYE) (SCO) prices.

Lower gasoline prices have a negative impact on the earnings of refiners like Phillips 66 (PSX), Tesoro (TSO), and Valero (VLO). Lower crude oil prices also negatively impact the earnings of oil producers like Matador Resources (MTDR), ExxonMobil (XOM), and Cobalt International Energy (CIE).

US Gasoline Demand Falls for 2nd Time in 5 Weeks

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US weekly gasoline demand hit a record in May 2017 at 9.8 MMbpd. US weekly gasoline demand was at 8.0 MMbpd in January 2017, the lowest since February 2014.

Gasoline production and imports 

US gasoline production fell 373,000 bpd to 10.1 MMbpd between July 14 and July 21, 2017. Production fell 3.5% week-over-week but rose 0.5% year-over-year.

US gasoline imports rose 63,000 bpd to 591,000 bpd between July 14 and July 21, 2017. Imports rose 12% week-over-week but fell 34% year-over-year.

US gasoline consumption estimates 

US gasoline consumption is expected to average 9.34 MMbpd in 2017 and 9.39 MMbpd in 2018, according to the EIA. It averaged 9.33 MMbpd in 2016, the highest level ever. US gasoline consumption is expected to hit a new high in 2018.

Impact  

US gasoline demand is expected hit a record this summer. Record gasoline demand would likely help gasoline prices and crude oil (XOP) (XLE) prices.

In the next article, we’ll discuss global crude oil supply outage and its impact on crude oil prices.

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