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US Gasoline Inventories Fell for the Third Straight Week

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US gasoline inventories 

The EIA (U.S. Energy Information Administration) reported that US gasoline inventories fell by 2,700,000 barrels to 232.7 MMbbls (million barrels) from August 5–12, 2016.

Industry surveys estimated that US gasoline inventories would fall by 1,600,000 barrels for the same period. The larger-than-expected decline in US gasoline inventories supported gasoline and crude oil prices on August 17, 2016. US gasoline inventories fell for the third straight week. For more on gasoline and crude oil prices, please read Part 1 and Part 6 in this series.

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US gasoline inventories 

For the week ending August 12, 2016, US gasoline inventories were 9.4% more than the same week in 2015. They’re also higher than the upper range for the last five years.

Citigroup estimates that global gasoline inventories stand at 500 MMbbls. High crude oil and gasoline inventories could pressure crude oil prices. To learn more, read How Lower Refinery Margins Impact Crude Oil Prices.

Gasoline production, imports, and demand 

US gasoline production rose by 182,000 bpd (barrels per day) to 10,280,000 bpd from August 5–12, 2016. Production rose by 1.8% week-over-week.

US gasoline imports fell by 320,000 bpd to 610,000 bpd from August 5–12, 2016. Gasoline demand fell by 5,000 bpd to 9,762,000 bpd for the same period.

Impact of gasoline inventories 

A rise in US gasoline exports could explain the decline in gasoline inventories for the week ending August 12, 2016. The US summer season will end in two weeks. US refineries’ seasonal maintenance will start after the summer. High gasoline inventories and refiners cutting back on crude oil processing could pressure US gasoline and crude oil prices.

Lower gasoline and crude oil prices impact oil producers and refiners’ profitability such as Tesoro (TSO), Western Refining (WNR), Northern Oil & Gas (NOG), and Synergy Resources (SYRG). It also impacts funds such as the Fidelity MSCI Energy (FENY), the United States Gasoline Fund (UGA), and the VelocityShares 3x Long Crude Oil ETN (UWTI).

In the final part of this series, we’ll take a look at US distillate inventories.

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