US gasoline demand
The EIA (U.S. Energy Information Administration) estimates that the four-week average US gasoline demand fell by 76,000 bpd (barrels per day) to 9,345,000 bpd on October 6–13, 2017. The demand fell 0.8% week-over-week but rose by 262,000 bpd or 2.8% YoY (year-over-year). The YoY rise in the gasoline demand is bullish for gasoline (UGA) and crude oil (OIL) (USO) (DTO) prices.
Volatility in gasoline prices impacts US refining (CRAK) companies like Holly Frontier (HFC), Western Refining (WNR), Marathon Petroleum (MPC), and PBF Energy (PBF).
US gasoline consumption’s peak and low
US gasoline consumption peaked at 9.8 MMbpd (million barrels per day) in July 2017. Consumption hit a record due to the record number of miles driven by US drivers in the summer. On the other hand, gasoline demand hit 8.0 MMbpd in January 2017—the lowest level since February 2014. The demand has risen 16.8% from the lows in January 2017.
US gasoline consumption estimates
The EIA estimates that US gasoline consumption will average 9.32 MMbpd in 2017. It’s expected to rise by 0.5 MMbpd to 9.37 MMbpd in 2018. US gasoline consumption could hit an annual record in 2018. Consumption averaged a record 9.32 MMbpd in 2016.
Record gasoline demand would likely benefit gasoline prices. Higher gasoline prices could support crude oil (DBO) (OIL) prices. Changes in oil (UCO) (UWT) prices impact energy producers (IXC) (FENY) like SM Energy (SM), ConocoPhillips (COP), and PDC Energy (PDCE).
In the next part, we’ll discuss how China’s crude oil imports impact oil prices.