US Gasoline Demand Fell for the Second Straight Week

US gasoline demand 

The EIA (U.S. Energy Information Administration) estimates that US gasoline demand fell by 48,000 bpd (barrels per day) to 9,269,000 bpd on June 9–16, 2017. US gasoline demand fell by 490,000 bpd or 5% year-over-year. US gasoline demand fell for the second consecutive week. The fall in gasoline demand is bearish for gasoline and crude oil (IXC) (IYE) (FXN) prices.

Lower gasoline and crude oil prices have a negative impact on refiners and oil producers’ earnings like Tesoro (TSO), Contango Oil & Gas (MCF), and Stone Energy (SGY).

US Gasoline Demand Fell for the Second Straight Week

Seasonality

The EIA reported that US gasoline inventories rose by 2.1 MMbbls (million barrels) to 242.3 MMbbls on June 2–9, 2017. Gasoline inventories rose at this time of the year when supplies should be falling seasonally. US gasoline demand for motor fuel fell to the lowest level since April 2017.

Gasoline prices

US gasoline inventories are above the five-year average. High gasoline inventories and weak gasoline demand also pressure gasoline prices. Gasoline prices fell 2% to $1.42 per gallon on June 20, 2017. July US gasoline futures are 13% lower than the same period in 2016.

Gasoline demand drivers 

However, market surveys estimate that gasoline consumption could hit a record this summer. A record number of US travelers this summer would drive gasoline demand. Record gasoline demand would support gasoline and crude oil prices. For more on gasoline’s demand forecast and inventories read, Analyzing US Gasoline Inventories and Gasoline Demand.

In the last part of this series, we’ll discuss China’s crude oil imports and demand in 2017.