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US Gasoline Inventories Helped Gasoline and Oil Prices

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Weekly US gasoline inventories 

The EIA released its crude oil inventory report on Wednesday, March 14, 2018. It reported that US gasoline inventories fell 6.2 MMbbls (million barrels) to 244.7 MMbbls between March 2 and March 9, 2018. The inventories also decreased by 4.5 MMbbls or 1.8% year-over-year.

Analysts had earlier estimated that US gasoline inventories would fall by 1.2 MMbbls from March 2 and March 9, 2018. A larger-than-expected decline in gasoline inventories supported gasoline and oil prices on March 14, 2018. US gasoline futures rose 2% to $1.92 per gallon on March 14, 2018. The United States Gasoline ETF (UGA) tracks gasoline futures. UGA rose 2.2% to $30.8 on March 14, 2018.

US crude oil futures contracts rose 0.41% to $60.96 per on March 14, 2018. The United States Oil ETF (USO) and the United States 12 Month Oil Fund (USL) track oil futures. USO and USL rose 0.3% and 0.2%, respectively, on March 14, 2018.

US gasoline production and demand  

US gasoline production increased 3.5% to 10,280,000 bpd (barrels per day) from March 29, 2018, per EIA. The production also increased by 740,000 bpd or 7.8% year-over-year.

US gasoline demand increased by 366,000 bpd to 9,642,000 bpd from March 29, 2018. The demand also increased 388,000 bpd or 4.1% year-over-year. The rise in gasoline demand has a positive impact on gasoline prices.

Higher gasoline prices relative to crude oil prices support the VanEck Vectors Oil Refiners ETF (CRAK). CRAK has exposure to refining companies. CRAK rose 0.5% to $29.9 on March 14, 2018, while US gasoline futures rose 2% on the same day.

Impact 

US gasoline inventories were ~3.4% above their five-year average, which is bearish for gasoline and oil prices. If US gasoline inventories drop below the five-year average, it’s a bullish sign for gasoline and crude oil prices.

Next, we’ll cover US distillate inventories.

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