US gasoline inventories
The EIA (U.S. Energy Information Administration) reported that US gasoline inventories fell 1.9 MMbbls (million barrels) to 225.5 MMbbls between September 30 and October 7.
A Reuters survey had estimated that US gasoline inventories would fall by 1.5 MMbbls for the same period. The larger-than-expected fall in gasoline inventories supported US gasoline and crude oil prices on October 13. For more on crude oil and gasoline prices, please read parts 1 and 7 of this series. US gasoline inventories fell for the seventh time in the last ten weeks. They’re now near December 2015 levels.
Gasoline production, imports, and demand
US gasoline production fell 53,000 bpd (barrels per day) to 9,935,000 bpd between September 30 and October 7. Production fell 0.5% week-over-week. US gasoline imports fell by 241,000 bpd to 762,000 bpd for the same period. Gasoline demand fell by 126,000 bpd to 9,264,000 bpd in the same period.
Impact of gasoline inventories
For the week ending October 7, 2016, US gasoline inventories were 2% 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), Valero Energy (VLO), Tesoro (TSO), Bonanza Creek Energy (BCEI), 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 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.