US gasoline inventories
The EIA (U.S. Energy Information Administration) reported that US gasoline inventories fell 2.9 MMbbls (million barrels) to 236.1 MMbbls between March 31 and April 7, 2017. A market survey estimated that US gasoline inventories would fall 1.7 MMbbls between March 31 and April 7, 2017. Gasoline prices fell despite the fall in gasoline inventories on April 12, 2017.
US gasoline inventories fell for the eighth straight week. As a result, US gasoline futures are near a 20-month high. Crude oil (ERY) (ERX) (FENY) and gasoline prices usually move together as they did on April 12, 2017. Moves in gasoline and crude oil prices impact the profitability of oil producers and refiners like Western Refining (WNR), Tesoro (TSO), Phillips 66 (PSX), Bonanza Creek Energy (BCEI), and Swift Energy (SFY). For more on crude oil and gasoline prices, read part one and part five of this series.
Gasoline production, imports, and demand
US gasoline production rose by 412,000 bpd (barrels per day) to 9,927,000 bpd between March 31 and April 7, 2017. Production rose 4.3% week-over-week and 3.7% year-over-year. US gasoline imports fell by 119,000 bpd to 488,000 bpd during the same period. Gasoline demand rose by 30,000 bpd to 9,275,000 bpd.
Impact of gasoline inventories
US gasoline inventories hit 259.1 MMbbls for the week ending February 10, 2017, the highest level ever. US gasoline inventories are 10% below their all-time high. The fall in gasoline inventories could support gasoline and crude oil prices.
In the next part of this series, we’ll take a look at US distillate inventories.
Patterson-UTI Energy (PTEN), one of the most prominent contract drillers in North America, has seen its stock rise 34% in the past year as of April 12, 2017.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
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.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.