US gasoline futures
Gasoline futures contracts for May delivery fell 3% to $1.65 per gallon on April 19, 2017. Prices fell due to the surprise build in US gasoline inventories. We’ll look at gasoline inventories in the next part of this series.
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 (USL) (PXI) prices and strong gasoline production between 2014 and 2016, as you can see in the above chart. As of April 19, 2017, gasoline active futures have risen 65% 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 (UCO) (XES) prices could have a positive impact on US refiners and oil producers such as Western Refining (WNR), Valero (VLO), Tesoro (TSO), QEP Resources (QEP), and Goodrich Petroleum (GDP).
On April 12, 2017, prices hit $1.77 per gallon—the highest level since August 2015. As of April 19, 2017, gasoline active futures are 7% below their 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.
The EIA (U.S. Energy Information Administration) reported that US distillate inventories fell by 2 MMbbls to 148.3 MMbbls on April 7–14, 2017.
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As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
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