US gasoline demand
The EIA (U.S. Energy Information Administration) estimated that four-week average US gasoline demand rose by 5,000 bpd (barrels per day) to 9,311,000 bpd between March 31, 2017, and April 7, 2017. US gasoline demand rose 0.1% week-over-week, but fell 0.9% year-over-year. US gasoline demand rose for the ninth time in the last ten weeks. The rise in gasoline demand is bullish for gasoline and crude oil (XES) (USL) (RYE) prices. For more on crude oil prices, read Part 1 and Part 2 of this series.
Higher gasoline and crude oil (FXN) (BNO) (IEZ) prices have a positive impact on refiners and oil producers’ earnings like Western Refining (WNR), Phillips 66 (PSX), SM Energy (SM), and Sanchez Energy (SN).
US gasoline prices hit $1.14 per gallon on March 15, 2016—the lowest price in 12 years. As of April 18, 2017, prices have risen 50.9% 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 have risen ~107.7% 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 and 2018
The EIA released its Short-Term Energy Outlook report on April 11, 2017. It estimates that US gasoline consumption will average 9,300,000 bpd and 9,340,000 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.
In the next part of this series, we’ll discuss how China’s crude oil imports and demand impact crude oil prices.