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Bearish Momentum in Crude Oil Prices Pressures Gasoline Futures

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Nov. 20 2020, Updated 5:24 p.m. ET

US gasoline futures 

April gasoline futures fell 2.4% to $1.65 per gallon on March 8, 2017. Prices fell despite the massive fall in US gasoline inventories. We’ll look at gasoline inventories in the next part of this series.

Bearish momentum in crude oil (PXI) (USO) (IYE) (IXC) prices pressured gasoline prices on March 8, 2017. For more on crude oil prices, read Part 1 of this series.

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Highs and lows 

US gasoline active futures contracts hit a low of $1.01 per gallon, the lowest level in 12 years, on February 26, 2016. Gasoline prices fell due to falling crude oil (SCO) (BNO) (DIG) prices and strong gasoline production between 2014 and 2016, as you can see in the above chart. As of March 8, 2017, gasoline active futures have risen 63.4% from their lows in February 2016 due to the increase in gasoline demand and recovery in crude oil prices in early 2016.

Higher gasoline and crude oil (PXI) (IEZ) prices could have a positive impact on US refiners and oil producers such as Tesoro (TSO), Cobalt International Energy (CIE), Valero Energy (VLO), and Whiting Petroleum (WLL).

On December 29, 2016, prices hit $1.68 per gallon—the highest level since August 2015. As of March 8, 2017, gasoline active futures fell 1.7% from their highs in December 2016 due to the decrease in gasoline demand in early 2017.

In the next part of this series, we’ll take a look at US gasoline inventories and how they impact gasoline and oil prices.

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