The EIA (U.S. Energy Information Administration) reported that US gasoline stocks rose by 1.4 MMbbls (million barrels) to 244 MMbbls for the week ending April 1, 2016—compared to the previous week. Market surveys estimated that the gasoline inventory could have fallen by 1 MMbbls for the same period. US gasoline inventories are 6% more than they were during the same period in 2015. They’re also higher than the five-year upper range.
Gasoline production, imports, and demand
The weekly US gasoline production rose by 187,000 bpd (barrels per day) to 9.6 MMbpd (million barrels per day) between March 25 and April 1, 2016. This is 5.5% more than the same period in 2015. The weekly US gasoline imports rose by 0.16 MMbpd to 0.67 MMbpd for the same period. Gasoline demand fell by 20,000 bpd to 9.2 MMbpd between March 25 and April 1, 2016.
Impact of the rise in gasoline inventories
Weaker gasoline demand led to the rise in gasoline stocks. This led to the fall in gasoline prices in the last few weeks. Read the previous part of the series to learn more about gasoline prices.
The fall in gasoline prices impacts US refiners like Tesoro (TSO), Valero Energy (VLO), and Northern Tier Energy (NTI). In contrast, high crude oil prices impact crude oil producers like Ultra Petroleum (UPL), Whiting Petroleum (WLL), Energy XXI (EXXI), and Goodrich Petroleum (GDP).
ETFs and ETNs like the Direxion Daily Energy Bull 3x Shares ETF (ERX), the PowerShares DWA Energy Momentum (PXI), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bear 3x (ERY), and the United States 12 Month Oil (USL) are influenced by the ups and downs in oil and gas prices.
Read the next part of the series to learn more about diesel fuel prices.