US gasoline futures
November gasoline futures fell 1.3% to $1.48 per gallon on October 26, 2016. Prices fell despite the larger-than-expected fall in US gasoline inventories. We’ll look at gasoline inventories in Part 8 of this series.
Bearish momentum in crude oil prices pressured gasoline prices on October 26, 2016. For more information on crude oil prices, read Part 1 of this series.
Highs and lows
Gasoline active futures contracts hit a low of $1.14 per gallon, the lowest level in 12 years, on February 8, 2016. On the other hand, prices hit $1.67 per gallon, the highest level since August 2015, on May 24, 2016.
As of October 26, 2016, gasoline active futures contracts rose 30% from their lows in February 2016 due to the increase in gasoline demand. However, gasoline active futures were 11.4% below their 2016 high. Gasoline inventories keep building despite strong demand. Read US Gasoline Demand: Bullish or Bearish for Crude Oil Prices? to learn more.
Impact on gasoline and crude oil prices
Lower gasoline and crude oil prices could have a negative impact on US refiners and oil producers such as Northern Tier Energy (NTI), Western Refining (WNR), Tesoro (TSO), Valero (VLO), Synergy Resources (SYRG), Swift Energy (SFY), and Whiting Petroleum (WLL).
Crude oil prices also impact ETFs and ETNs like the VelocityShares 3X Inverse Crude Oil ETN (DWTI), the United States Gasoline Fund (UGA), the VelocityShares 3x Long Crude Oil ETN (UWTI), the Direxion Daily Energy Bull 3x Shares ETF (ERX), 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.