US gasoline inventories
The EIA estimates that US gasoline inventories rose by 894,000 barrels or 0.4% to 210.4 MMbbls (million barrels) on November 3–10, 2017. However, inventories have fallen by 11.2 MMbbls or 5.1% YoY (year-over-year).
The market expected that US gasoline inventories would have fallen by 1,100,000 barrels on November 3–10, 2017. An unexpected build in gasoline inventories pressured US gasoline (UGA) and crude oil (DTO) (OIL) (UWT) prices. US gasoline futures fell 1.3% to $1.73 per gallon on November 15, 2017.
US gasoline production and demand
The EIA added that US gasoline production fell by 315,000 bpd (barrels per day) to 9,852,000 bpd on November 3–10, 2017. Production fell 3.1% week-over-week and by 300,000 bpd or 2.9% YoY.
US gasoline demand fell by 324,000 bpd to 9,172,000 bpd on November 3–10, 2017. Demand fell by 187,000 bpd or 2% YoY. Any fall in gasoline demand is bearish for gasoline and crude oil (DBO) (DWT) prices. Lower oil prices are bearish for energy producers (FXN) (IEO) like Chevron (CVX), QEP Resources (QEP), and PDC Energy (PDCE). Lower gasoline prices are bearish for US refiners (CRAK) like Holly Frontier (HFC), Phillips 66 (PSX), and PBF Energy (PBF).
Impact of gasoline inventories
US gasoline inventories are above the five-year average. Any rise in gasoline inventories could pressure gasoline and crude oil (SCO) (BNO) prices. However, inventories have fallen ~20% from their all-time high. Any fall in gasoline inventories is bullish for gasoline and crude oil prices.
In the next part, we’ll discuss US distillate inventories.