API’s gasoline inventories  

The API (American Petroleum Institute) released its weekly inventory report on March 14, 2017. It estimated that US gasoline inventories fell by 3.8 MMbbls (million barrels) from March 3–10, 2017. US distillate inventories also fell by 4.1 MMbbls during the same period.

A market survey estimates that US gasoline inventories could have fallen by 1.9 MMbbls from March 3–10, 2017. US distillate inventories could have fallen by 1.6 MMbbls during the same period.

Changes in refined product inventories also impact crude oil (XES) (RYE) (SCO) prices. A larger-than-expected fall in gasoline and distillate inventories is bullish for gasoline prices. When gasoline prices rise, they can impact refiners’ crude oil demand, which in turn supports crude oil prices. For more on crude oil prices and its drivers, read Part 1 of this series. 

Distillate and Gasoline Inventories Could Help Oil Prices

Volatility in gasoline and crude oil prices could impact refiners and oil producers’ earnings like Valero (VLO), Phillips 66 (PSX), Goodrich Petroleum (GDP), and Warren Resources (WRES).

EIA’s gasoline inventories  

On March 15, 2017, the EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending March 10, 2017.

For the week ending March 3, 2017, the EIA reported that US gasoline inventories fell by 6.6 MMbbls to 249.3 MMbbls. US distillate inventories fell by 2.7 MMbbls to 161.5 MMbbls.

Impact 

A larger-than-expected fall in gasoline and distillate inventories could support gasoline and crude oil (IXC) (IYE) (VDE) prices. However, a rise in inventories could pressure gasoline and crude oil prices.

In the next part of this series, we’ll take a look at gasoline demand. We’ll discuss how it impacts gasoline and crude oil prices.

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