US gasoline inventories
The EIA (U.S. Energy Information Administration) reported that US gasoline inventories rose by 0.7 MMbbls (million barrels) to 221.7 MMbbls from November 4–11, 2016.
Market surveys estimated that US gasoline inventories would fall by 0.4 MMbbls for the same period. US gasoline prices fell due to the unexpected rise in gasoline inventories on November 16, 2016. For more on crude oil and gasoline prices, please read Part 1 and Part 6 of this series. US gasoline inventories rose for the fifth time in the last ten weeks.
Gasoline production, imports, and demand
US gasoline production fell by 304,000 bpd (barrels per day) to 10,152,000 bpd from November 4–11, 2016. Production fell 3% week-over-week, but rose 6.2% year-over-year.
US gasoline imports rose by 321,000 bpd to 821,000 bpd for the same period. Gasoline demand rose by 146,000 bpd to 9,359,000 bpd during the same period.
Impact of gasoline inventories
For the week ending November 11, 2016, US gasoline inventories were 3.5% higher than the same period in 2015. They’re also higher than the upper range for the last five years. High gasoline inventories could pressure gasoline and crude oil prices.
Lower gasoline and crude oil prices could have a negative impact on oil producers and refiners’ profitability like Marathon Oil (MRO), Northern Tier Energy (NTI), Denbury Resources (DNR), Valero Energy (VLO), Tesoro (TSO), Bonanza Creek Energy (BCEI), ConocoPhillips (COP), and Swift Energy (SFY).
The rollercoaster ride in crude oil prices also impacts funds such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the iShares Global Energy ETF (IXC), the iShares U.S. Energy ETF (IYE), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the United States Gasoline Fund (UGA), 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.