API’s gasoline inventories
The API (American Petroleum Institute) released its weekly US gasoline and distillate inventory data on June 19 after the market closed. The API reported that US gasoline inventories rose by ~2.1 MMbbls (million barrels) on June 8–15.
A Reuters survey estimates that US gasoline inventories could have risen by ~0.2 MMbbls during the same period. US gasoline gas futures contracts rose 0.5% from the previous settlement in early morning trade on June 20.
Before the API data were released, US gasoline futures fell 0.8% and closed at $2.03 per gallon on June 19. A larger-than-expected build in gasoline inventories reported by the EIA on June 20 could pressure gasoline prices. Lower gasoline prices could also pressure crude oil prices. However, a surprise drop in gasoline inventories could support gasoline and oil prices. Crude oil and gasoline futures usually move together.
US crude oil prices fell 1.2% on June 19. The VanEck Vectors Oil Refiners ETF (CRAK) fell 1% on June 19. CRAK has exposure to refining companies. Marathon Petroleum (MPC), Phillips 66 (PSX), Andeavor (ANDV), and PBF Energy (PBF) fell ~0.4%, 0.3%, 0.28%, and ~0.2%, respectively, on June 19. These stocks account for ~24% of CRAK’s holdings.
API’s distillate inventories
The API estimates that US distillate inventories increased by ~0.8 MMbbls on June 8–15. A Reuters survey estimates that US distillate inventories could have declined by ~0.2 MMbbls during the same period.
A larger-than-expected drop in distillate inventories reported by the EIA could support diesel and oil prices. However, an unexpected increase in distillate inventories could pressure diesel and oil prices.
Next, we’ll discuss the US Dollar Index.