US gasoline demand
The EIA (U.S. Energy Information Administration) estimates that the four-week average US gasoline demand increased 1.6% to 9,671,000 bpd (barrels per day) on May 18–25. The demand also increased by 74,000 bpd or 0.8% from a year ago.
An increase in the gasoline demand has a positive impact on gasoline and crude oil prices. US gasoline and WTI crude oil futures have increased ~52% and ~55%, respectively, since June 21, 2017. Gasoline and WTI oil futures are near the highest level since 2014.
The United States Gasoline ETF (UGA) tracks US gasoline futures. UGA has increased ~52.1% since June 21, 2017. The VanEck Vectors Oil Refiners ETF (CRAK) increased 51.2% during the same period. CRAK has exposure to refining companies.
HollyFrontier (HFC), Delek Holdings (DK), and PBF Energy (PBF) account for 10.2% of CRAK holdings. These stocks have risen ~226%, ~145%, and ~136%, respectively. These stocks have been among the top percentage gainers in CRAK’s portfolio since June 21, 2017.
US gasoline consumption estimates
The US gasoline consumption averaged 9.32 MMbpd (million barrels per day) in 2016 and 2017. According to the EIA, US gasoline consumption could average 9.32 MMbpd in 2018 and 9.39 MMbpd in 2019. Annual gasoline consumption will likely hit a record if these projections are achieved in 2019.
US gasoline demand was ~4.1% above its five-year average, which is bullish for gasoline and crude oil prices.
Next, we’ll discuss US and Cushing inventories.