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Will Gasoline Inventories Help Crude Oil Prices Recover?

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Nov. 20 2020, Updated 1:37 p.m. ET

API’s gasoline inventories  

The API (American Petroleum Institute) released its weekly inventory report on March 28, 2017. It estimated that US gasoline inventories fell by 1.1 MMbbls (million barrels) from March 17–24, 2017. US distillate inventories fell by 2 MMbbls during the same period.

A market survey estimates that US gasoline inventories could have fallen by 1.8 MMbbls from March 17–24, 2017. US distillate inventories could have fallen by 1.2 MMbbls during the same period.

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Changes in refined product inventories also impact crude oil (SCO) (RYE) (XES) 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 and Part 2 of this series.

Moves in gasoline and crude oil prices could impact refiners and oil producers’ earnings like Tesoro (TSO), Phillips 66 (PSX), Whiting Petroleum (WLL), and Swift Energy (SFY).

EIA’s gasoline inventories  

On March 29, 2017, the EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending March 24, 2017.

For the week ending March 17, 2017, the EIA reported that US gasoline inventories fell by 2.8 MMbbls to 243.5 MMbbls. US distillate inventories also fell by 1.9 MMbbls to 155.4 MMbbls for the same period.

Impact 

A larger-than-expected fall in gasoline and distillate inventories could support gasoline and crude oilcrude oil prices (XLE) (USO) (ERX) prices. However, a rise in inventories could pressure gasoline and crude oilcrude 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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