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Gasoline Demand and Crude Oil Inventories Drive Oil Futures

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Part 5
Gasoline Demand and Crude Oil Inventories Drive Oil Futures PART 5 OF 5

US Distillate Inventories Fell for the Third Consecutive Week

US distillate inventories 

The EIA (U.S. Energy Information Administration) released its weekly crude oil and gasoline inventory report on August 2, 2017. It reported that US distillate inventories fell 0.1% or by 0.15 MMbbls (million barrels) to 149.4 MMbbls on July 21–28, 2017. US distillate inventories fell 2.4% or by 3.74 MMbbls—compared to the same period in 2016.

A Bloomberg survey estimated that distillate inventories would have fallen by 0.9 MMbbls on July 21–28, 2017. US diesel and crude oil (USL) (IEZ) (XES) futures rose due to the fall in inventories on August 2, 2017. They rose 1.1% to $1.65 per gallon on August 2, 2017.

US Distillate Inventories Fell for the Third Consecutive Week

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Higher crude oil and diesel prices have a positive impact on oil producers and refiners like Phillips 66 (PSX), Tesoro (TSO), Bonanza Creek Energy (BCEI), Carrizo Oil & Gas (CRZO), and Hess (HES).

US distillate production, imports, and demand  

US distillate production rose 2% or by 101,000 bpd (barrels per day) to 5.2 MMbpd (million barrels per day) on July 21–28, 2017. Production rose 5.9% or by 292,000 bpd—compared to the same period in 2016.

US distillate imports fell 17% or by 22,000 bpd to 108,000 bpd on July 21–28, 2017. Imports rose 12.5% or by 12,000 bpd—compared to the same period in 2016.

Distillate demand fell 5.4% or by 236,000 bpd to 4.1 MMbpd on July 21–28, 2017. Demand rose 15% or by 535,000 bpd—compared to the same period in 2016.

Impact

Inventories fell 2% or by 3 MMbbls in the last seven weeks. Inventories are also below the five-year range. The fall in distillate inventories would benefit diesel and crude oil futures.

Read Are Crude Oil Futures Trading Close to Resistance Level? for more information on crude oil price forecasts.

Read Is the Worst Over for the Crude Oil Market? and Crude Oil Futures Are near a 2-Month High for more information.

To learn more about natural gas, read US Natural Gas Market: Fundamental Insights for Investors.

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