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US Gasoline Inventories Could Help Crude Oil Bulls

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US gasoline inventories 

The U.S. Energy Information Administration released its weekly petroleum status on June 21, 2017. It reported that US gasoline inventories fell by 0.6 MMbbls (million barrels) or 0.23% to 241.9 MMbbls on June 9–16, 2017. US gasoline inventories rose 1.8% from the same period in 2016.

An unexpected fall in US gasoline inventories and a larger-than-expected fall in crude oil inventories didn’t support WTI crude oil (FXN) (IXC) (IYE) futures on June 21, 2017. WTI crude oil prices fell 2.3% on June 21, 2017, due to oversupply concerns.

Gasoline prices also fell 0.7% to $1.41 per gallon on June 20, 2017. Lower gasoline and crude oil prices have a negative impact on refiners and oil producers’ earnings like Matador Resources (MTDR), Western Refining (WNR), Marathon Petroleum (MPC), and QEP Resources (QEP). 

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US gasoline production, import, and demand 

US gasoline production rose 3.2% to 10,163,000 bpd (barrels per day) on June 9–16, 2017. Production fell 1.2% YoY (year-over-year).

US gasoline imports rose by 335,000 to 909,000 bpd on June 9–16, 2017. Imports fell 3.7% YoY.

US gasoline demand rose 5.9% to 9,816,000 bpd on June 9–16, 2017.

Impact of gasoline inventories  

US gasoline inventories are above the five-year average. However, the expectation of record gasoline demand this summer could drain US gasoline inventories. It would support gasoline and crude oil prices.

In the next part of this series, we’ll take a look at US distillate inventories.

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