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Gasoline and Crude Oil Futures Move in the Opposite Direction

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Nov. 20 2020, Updated 12:27 p.m. ET

US gasoline futures 

Gasoline futures contracts for May delivery fell 0.4% to $1.71 per gallon on April 5, 2017. Prices fell despite the fall in US gasoline inventories. We’ll look at gasoline inventories in the next part of this series.

Crude oil (USO) (BNO) (PXI) (IYE) and gasoline futures usually move together. However, prices moved in the opposite direction on April 5, 2017. For more on crude oil prices, read Part 1 of this series.

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Highs and lows 

On February 26, 2016, US gasoline active futures contracts hit a low of ~$1 per gallon—the lowest level in 12 years. Gasoline prices fell due to falling crude oil (XES) (IEZ) prices and strong gasoline production between 2014 and 2016, as you can see in the above chart. As of April 5, 2017, gasoline active futures have risen 68.3% 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 (VDE) (RYE) prices could have a positive impact on US refiners and oil producers such as Tesoro (TSO), Marathon Petroleum (MPC), Phillips 66 (PSX), Bonanza Creek Energy (BCEI), and Swift Energy (SFY).

On April 4, 2017, prices hit $1.72 per gallon—the highest level since August 2015. In this series, we’ll discuss why gasoline prices are near 19-month highs.

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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