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Largest Weekly Decline for US Gasoline Inventories since April 2016

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Dec. 4 2020, Updated 10:53 a.m. ET

Gasoline inventories 

The EIA (U.S. Energy Information Administration) reported that US gasoline inventories fell by 2.5 MMbbls (million barrels) to 238.1 MMbbls for the week ending May 13—compared to the previous week. It’s the largest decline in US gasoline inventories since April 8, 2016.

Industry surveys estimated that weekly US gasoline inventories would fall by 0.15 MMbbls for the same period. The better-than-expected decline boosted gasoline prices. To learn more about gasoline prices, please read the previous part of this series. US gasoline inventories hit a high of 259 MMbbls for the week ending February 12, 2016. The total US gasoline inventory is 6% more than in the same period in 2015. It’s also more than the five-year upper range.

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Gasoline production, imports, and demand

The EIA added that US gasoline production fell by 54,000 bpd (barrels per day) to 9.99 MMbpd (million barrels per day) for the week ending May 13, 2016—compared to the previous week. This was a 3% rise compared to the same period in 2015. US weekly gasoline imports fell by ~0.09 MMbpd to 0.69 MMbpd for the week ending May 13, 2016—compared to the previous week.

The gasoline demand rose by 97,000 bpd to 9.75 MMbpd for the same period. This is 5.1% more than the same period in 2015.

Impact of the gasoline inventories

The rise in gasoline demand and fall in gasoline production and imports led to the decline in the US gasoline inventory. The fall in gasoline inventories benefits gasoline prices. High gasoline and high crude oil prices benefit oil producers and refiners like Denbury Resources (DNR), Northern Tier Energy (NTI), PDC Energy (PDCE), Cobalt International Energy (CIE), and Stone Energy (SGY).

The volatility in crude oil prices impacts funds such as the PowerShares DWA Energy Momentum ETF (PXI), the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the United States Brent Oil ETF (BNO), and the VelocityShares 3x Long Crude Oil ETN (UWTI).

For ongoing analysis, visit Market Realist’s Upstream Oil and Gas page.

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