Will the EIA’s Gasoline Inventories Surprise Traders?
Crude oil futures
US crude oil (USO) (UCO) (SCO) futures contracts for November delivery rose 0.7% to $52.24 per barrel in electronic trade at 2:10 AM on Wednesday, September 27, 2017. Prices rose due to the surprise draw in US crude oil inventories reported by the API (American Petroleum Institute) the previous day.
The E-Mini S&P 500 (SPY) December futures contracts rose 0.1% to 2,498 in electronic trading at 2:10 AM on September 27, 2017.
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API’s gasoline inventories
The API estimates that US gasoline inventories rose 1.47 MMbbls (million barrels) between September 15, 2017, and September 22, 2017. The market expected a draw in US gasoline inventories by 0.9 MMbbls during the period.
US gasoline (UGA) futures fell 1.3% to $1.698 per gallon on September 26 and had fallen 0.32% to $1.693 per gallon in electronic trading by 2:25 AM on September 27. US gasoline futures fell in post-settlement trade due to the surprise build in gasoline inventories.
API’s distillate inventories
The API estimates that US distillate inventories fell 4.7 MMbbls between September 15 and September 22. The market expected a draw in US distillate inventories by 2.1 MMbbls during this period. US diesel futures fell 0.6% to $1.84 per gallon on September 26.
The EIA’s crude oil and gasoline inventory report
On September 27, 2017, the EIA (US Energy Information Administration) will release its weekly crude oil and gasoline inventory report at 10:30 AM.
If the EIA reports a surprise draw in US crude oil inventories like the API did, it would benefit crude oil (UWT) (DWT) prices. However, an unexpected rise in gasoline inventories could pressure gasoline prices. Consequently, it may pressure crude oil prices as well.
In the next part of this series, we’ll discuss how gasoline demand impacts crude oil prices.