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Gasoline and Distillate Inventories Could Boost Crude Oil Futures

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API’s gasoline inventories 

On April 3, 2018, the API (American Petroleum Institute) released its crude oil inventory report. The API reported that US gasoline inventories increased by 1.1 MMbbls (million barrels) on March 23–30, 2018. Analysts estimate that US gasoline inventories could have dropped by ~1.3 MMbbls during the same period.

A larger-than-expected drop in gasoline inventories reported by the EIA could help gasoline prices. Higher gasoline prices could also support crude oil prices. However, an unexpected build in gasoline inventories could weigh on gasoline and oil prices.

US gasoline futures rose 0.4% to $1.97 per gallon on April 3, 2018. The United States Gasoline ETF (UGA) follows gasoline futures. UGA rose 0.3% to $31.55 on April 3, 2018.

US oil prices rose 0.8% on April 3, 2018. The PowerShares DB Oil Fund (DBO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) increased ~0.8% and ~1.1%, respectively, on the same day. DBO follows the DBIQ Optimum Yield Crude Oil Index Excess Return, while UCO targets to provide twice the daily return of an index of WTI oil futures contracts.

API’s distillate inventories 

The API added that US distillate inventories increased by 2.2 MMbbls on March 23–30, 2018. Analysts estimate that US distillate inventories could have declined by 1.1 MMbbls during the same period.

A larger-than-expected drop in distillate inventories reported by the EIA could benefit diesel and oil prices. However, an unexpected rise in distillate inventories could weigh on diesel and oil prices.

Next, we’ll discuss the US Dollar Index.

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