US gasoline inventories
According to the EIA, US gasoline inventories rose by 6,780,000 barrels to 220.8 MMbbls (million barrels) on November 24–December 1, 2017. Inventories rose 3% week-over-week but fell by 8.6 MMbbls or 3.7% from a year ago.
Market surveys expected that US gasoline inventories would have risen by 1,741,000 barrels on November 24–December 1, 2017. A massive rise in gasoline inventories weighed on gasoline (UGA) and crude oil (SCO) (USL) prices on December 6, 2017. US gasoline futures fell 3.3% to $1.66 per gallon on the same day.
US gasoline production and demand
US gasoline production fell by 464,000 bpd (barrels per day) or 4.5% to 9.7 MMbpd (million barrels per day) on November 24–December 1, 2017, according to the EIA. The production also fell by 155,000 bpd or 1.5% from the same period in 2016.
US gasoline demand rose by 171,000 bpd or 2% to 8.8 MMbpd on November 24–December 1, 2017. Gasoline demand also rose by 138,000 bpd or 1.6% from the same period in 2016. The rise in gasoline demand is positive for gasoline and oil (UWT) prices.
Higher gasoline (UGA) prices have a positive impact on refining companies (CRAK) like Holly Frontier (HFC), Phillips 66 (PSX), and PBF Energy (PBF).
US gasoline inventories rose for the fourth straight week. They’re 2.3% above their five-year average for the week ending December 1, 2017. It’s bearish for gasoline and oil (USO) prices.
Next, we’ll discuss why US distillate inventories are bearish for oil prices.
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