November gasoline futures rose 4.9% and closed at $1.43 per gallon on September 28, 2016. Gasoline futures rose despite the larger-than-expected rise in US gasoline inventories. We’ll look at gasoline inventories in Part 8 of this series.
Bullish momentum in crude oil prices supported gasoline prices on September 28, 2016. Gasoline futures tested a three-month high on that day. For more information on crude oil prices, read Part 1 of this series.
Highs and lows
Gasoline prices hit a low of $1.14 per gallon—the lowest level in 12 years—on February 8, 2016. In contrast, prices hit $1.67 per gallon—the highest level since August 2015—on May 24, 2016.
As of September 28, 2016, gasoline prices rose 26% from the lows made in February 2016 due to the increase in gasoline demand. However, prices were 14% below their 2016 high. Gasoline inventories keep building despite strong demand. Read Will High Gasoline Demand Boost Gasoline and Crude Oil Prices? to learn more.
Impact on gasoline and crude oil prices
Higher gasoline and crude oil prices have a positive impact on US refiners and oil producers such as PDC Energy (PDCE), Western Refining (WNR), Tesoro (TSO), Valero Energy (VLO), Carrizo Oil & Gas (CRZO), Northern Tier Energy (NTI), and Whiting Petroleum (WLL).
Prices also impact ETFs and ETNs like the VelocityShares 3X Inverse Crude Oil ETN (DWTI), the iShares Global Energy ETF (IXC), the United States Gasoline Fund (UGA), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), and the Vanguard Energy ETF (VDE).
In the next part of this series, we’ll take a look at US average retail gasoline prices and forecasts.