US gasoline inventories
The EIA (U.S. Energy Information Administration) reported that US gasoline inventories rose 222,000 barrels to 227.4 MMbbls (million barrels) between September 23 and September 30, 2016.
Market surveys had estimated that US gasoline inventories would rise by 702,000 barrels for the same period. US gasoline futures were flat despite the less-than-expected rise in gasoline inventories on October 5, 2016. For more on crude oil and gasoline prices, please read part one and part six in this series. US gasoline inventories rose for the third time in the last nine weeks.
Gasoline production, imports, and demand
US gasoline production rose 433,000 bpd (barrels per day) to 9,988,000 bpd between September 23 and September 30, 2016. Production rose 4.5% week-over-week. US gasoline imports rose by 225,000 bpd to 1,003,000 bpd for the same period. Gasoline demand rose by 510,000 bpd to 9,390,000 bpd in the same period.
Impact of gasoline inventories
For the week ending September 30, 2016, US gasoline inventories were 1.5% higher than in the same period 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 and gasoline prices. To learn more, read How Lower Refinery Margins Impact Crude Oil Prices.
Lower gasoline and crude oil prices could have a negative impact on the profitability of oil producers and refiners like Swift Energy (SFY), Triangle Petroleum (TPLM), Valero Energy (VLO), Tesoro (TSO), and Northern Tier Energy (NTI).
Prices also impact funds such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the United States Gasoline Fund (UGA), the PowerShares DWA Energy Momentum (PXI), the Direxion Daily Energy Bear 3x ETF (ERY), the Fidelity MSCI Energy (FENY), and the VelocityShares 3x Long Crude Oil ETN (UWTI).
In the next part of this series, we’ll take a look at US diesel fuel prices.