US gasoline demand
The EIA (U.S. Energy Information Administration) estimated that four-week average US gasoline demand rose by 134,000 bpd (barrels per day) to 9,102,000 bpd from March 10–17, 2017. US gasoline demand rose 1.5% week-over-week, but fell 2.9% year-over-year. US gasoline demand rose for the seventh time in the last eight weeks. The rise in gasoline demand is bullish for gasoline and crude oil (DIG) (VDE) (IXC) (IYE) prices. For more on crude oil prices, read Part 1 and Part 2 of this series.
Higher gasoline and crude oil (FENY) (SCO) (FXN) prices have a positive impact on refiners and oil producers’ earnings like Phillips 66 (PSX), Tesoro (TSO), Bonanza Creek Energy (BCEI), Sanchez Energy (SN), and Goodrich Petroleum (GDP).
US gasoline prices hit $1.14 per gallon on March 15, 2016—the lowest price in 12 years. As of March 28, 2017, prices have risen 43% from their lows in February 2016 due to the increase in gasoline demand. Rising gasoline demand partially supported crude oil prices as well. US crude oil prices had risen ~83% during the same period. Changes in gasoline demand drive gasoline inventories. For updates on gasoline inventories, read the previous part of the series.
US gasoline consumption estimates for 2017
The EIA estimates that US gasoline consumption will average 9,290,000 bpd and 9,390,000 bpd in 2017 and 2018, respectively. US gasoline consumption figures for 2018 will be the highest ever.
US gasoline consumption averaged 9,330,000 bpd and 9,180,000 bpd in 2016 and 2015, respectively. US gasoline consumption hit a record in 2016. High gasoline consumption over the long term should have a positive impact on gasoline and crude oil prices.
Read Will Crude Oil Prices Test 3 Digits Again? and Russia’s Central Bank: Crude Oil Prices Could Hit $40 per Barrel for more on crude oil price forecasts.
Read What Can Investors Expect in the Crude Oil Market in 2017? for more on crude oil prices.
For more industry analysis, visit Market Realist’s Energy and Power page.