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Will Gasoline and Distillate Stocks Support Crude Oil Prices?

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API gasoline and distillate stocks

The API (American Petroleum Institute) reported that gasoline and distillate stocks fell by 0.76 MMbbls (million barrels) and 2 MMbbls, respectively, for the week ended February 12, 2016.

In contrast, gasoline and distillate stocks rose by 3.1 MMbbls and 1.7 MMbbls, respectively, for the week ended February 5, 2016. The API report added that Cushing crude oil stocks fell by 0.18 MMbbls for the week ended February 12, 2016.

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EIA gasoline and distillate stocks 

The EIA (U.S. Energy Information Administration) reported that US gasoline inventories rose by 1.3 MMbbls (million barrels) to 255.7 MMbbls for the week ended February 5, 2016. Similarly, distillate inventory rose by 1.3 MMbbls (million barrels) to 161 MMbbls for the same period.

The EIA is releasing its Weekly Petroleum Status Report on February 18. Market surveys project that gasoline stocks could rise by 0.5 MMbbls (million barrels) for the week ended February 12, 2016. In contrast, distillate stocks are expected to fall by 1.5 MMbbls for the same period. Market intelligence company Genscape estimates that Cushing crude oil inventory rose by 705,000 barrels for the same period.

Impact

The consensus of rising gasoline and Cushing crude oil stocks could negatively put pressure on oil prices. However, the consensus of falling distillate stocks could positively benefit crude oil prices.

Volatility in oil prices affects ETFs such as the VanEck Vectors Oil Refiners ETF (CRAK), the United States Oil ETF (USO), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the First Trust Energy AlphaDEX ETF (FXN), the Direxion Daily Energy Bull 3X ETF (ERX), and the Vanguard Energy ETF (VDE).

Long-term lower crude oil prices affect oil producers such as ExxonMobil (XOM), Chevron (CVX), Hess (HES), Occidental Petroleum (OXY), ConocoPhillips (COP), and Energy XXI (EXXI). In contrast, they support oil refiners such as Phillips 66 (PSX), Marathon Petroleum (MPC), and Valero Energy (VLO).

Read the next part of this series to find out whether the United States will join the new alliance in freezing oil prices.

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