US gasoline inventories
The EIA (U.S. Energy Information Administration) reported that US gasoline inventories rose by 0.5 MMbbls (million barrels) to 230 MMbbls from December 2–9, 2016.
A market survey estimated that US gasoline inventories would rise by 2.5 MMbbls for the same period. As a result, US gasoline prices fell on December 14, 2016, due to the rise in gasoline inventories. US gasoline inventories rose for the ninth time in the last 14 weeks.
The rise in gasoline inventories also pressured crude oil (BNO) (PXI) (XOP) (USL) (ERX) prices. For more on crude oil prices, read How Cushing Inventories and OPEC Are Pressuring Crude Prices. For more on gasoline prices, please read the previous part of this series.
Gasoline production, imports, and demand
US gasoline production fell by 85,000 bpd (barrels per day) to 9,828,000 bpd from December 2–9, 2016. Production fell 0.9% week-over-week and 1.3% year-over-year. US gasoline imports fell by 28,000 bpd to 624,000 bpd in the same period. Gasoline demand rose by 117,000 bpd to 8,874,000 bpd during the period.
Impact of gasoline inventories
For the week ending December 9, 2016, US gasoline inventories were 5% higher than they were in 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 Phillips 66 (PSX), Northern Tier Energy (NTI), Valero Energy (VLO), ConocoPhillips (COP), PDC Energy (PDCE), Bonanza Creek Energy (BCEI), Warren Resources (WRES), Triangle Petroleum (TPLM), and Swift Energy (SFY).
Moves in crude oil prices also impact funds such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the Fidelity MSCI Energy (FENY), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the United States Oil ETF (USO), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), and the United States Gasoline Fund (UGA).
In the next part of this series, we’ll take a look at US diesel prices.