US gasoline futures
June gasoline futures contracts rose 4% to $1.54 per gallon on May 10, 2017. Prices rose due to the fall 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 (IYE) (USL) prices and strong gasoline production between 2014 and 2016, as you can see in the above chart. As of May 10, 2017, gasoline active futures have risen 54% from their lows in February 2016 due to the increase in gasoline demand and rise in crude oil prices in 2016.
Higher gasoline and crude oil (XLE) (XOP) prices have a positive impact on US refiners and oil producers such as Tesoro (TSO), Marathon Petroleum (MPC), Valero Energy (VLO), Swift Energy (SFY), and Goodrich Petroleum (GDP).
On April 12, 2017, prices hit $1.77 per gallon—the highest level since August 2015. As of May 10, 2017, gasoline active futures are 13% 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.