US gasoline futures
June gasoline futures contracts rose 1.3% to $1.53 per gallon on May 3, 2017. Prices rose due to the less-than-expected rise 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 (ERY) (ERX) prices and strong gasoline production between 2014 and 2016, as you can see in the above chart. As of May 2, 2017, gasoline active futures have risen 53% 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 (ERY) (ERX) prices have a positive impact on US refiners and oil producers such as Phillips 66 (PSX), Valero Energy (VLO), Continental Resources (CLR), and Denbury Resources (DNR).
On April 12, 2017, prices hit $1.77 per gallon—the highest level since August 2015. As of May 2, 2017, gasoline active futures are 14% below their highs due to the fall in gasoline demand.
In the next part of this series, we’ll take a look at US gasoline inventories and how they impact gasoline and oil prices.
June diesel futures contracts rose 0.7% to $1.47 per gallon on May 3, 2017. Prices rose due to the fall in distillate inventories.
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.