14 Dec

US Gasoline Inventories: Turning Point for Crude Oil Futures?

WRITTEN BY Gordon Kristopher

US gasoline inventories 

US gasoline inventories rose by 5.6 MMbbls (million barrels) or 2.6% to 226.5 MMbbls on December 1–8, 2017. However, inventories fell by 3.4 MMbbls or 1.5% YoY (year-over-year).

Reuters surveys expected that US gasoline inventories would have risen by 2.5 MMbbls on December 1–8, 2017. Gasoline and crude oil (UCO) (SCO) futures fell on December 13, 2017, due to the massive build in gasoline inventories. US gasoline (UGA) futures fell 3% to $1.64 per gallon on December 13, 2017.

US Gasoline Inventories: Turning Point for Crude Oil Futures?

Crude oil prices are near a one-week low. Lower oil (UCO) prices have a negative impact on energy producers (FXN) (IXC) like Bill Barrett (BBG) and Bonanza Creek Energy (BCEI). Likewise, lower gasoline (UGA) prices have a negative impact on US refiners (CRAK) like Phillips 66 (PSX) and CVR Energy (CVI).

US gasoline production and demand  

US gasoline production rose by 371,000 bpd (barrels per day) to 10.1 MMbpd (million barrels per day) on December 1–8, 2017, according to the EIA. Production rose 3.8% week-over-week and by 301,000 bpd or 3.1% YoY.

US gasoline demand rose by 196,000 bpd to 9.1 MMbpd on December 1–8, 2017. Demand rose 2.2% week-over-week and by 217,000 bpd or 2.4% YoY. The rise in gasoline demand is bullish for gasoline and oil (USO) prices.

Impact  

US gasoline inventories increased for the fifth consecutive week. Inventories rose by 17 MMbbls or 8.1% during this period. If the momentum continues, it would add more pressure to gasoline and oil prices.

Gasoline inventories are also 3% above their five-year average for the week ending December 8, 2017. Any rise in gasoline inventories is bearish for gasoline and oil (UWT) prices.

Next, we’ll discuss US distillate inventories.

Latest articles

Even as Disney+ launch pulled on NFLX stock, Netflix leadership believes the company will survive the attack on its market dominance.

Fake bitcoin investment ads put Facebook in trouble with Dutch billionaire and Big Brother reality show founder John de Mol.

On Wednesday, Barclays initiated coverage on Ralph Lauren (RL) stock with an “overweight” rating. Barclays put a target price of $130 on the stock.

During the Golden Steering Wheel awards ceremony, Tesla’s (TSLA) CEO Elon Musk revealed that Berlin was selected for the company's next Gigafactory.

Last month, it looked like phase one of a US-China trade agreement was a done deal. However, several obstacles have appeared.

The strong sell-off continues in Energy Transfer (ET) stock. The stock lost another 4% and closed at its three-year low of $11.16 on Wednesday.