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US Gasoline Inventories Help Gasoline Futures

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Jul. 9 2018, Published 10:26 a.m. ET

Weekly US gasoline inventories 

The EIA (U.S. Energy Information Administration) released its gasoline inventory data on July 5. The EIA reported that US gasoline inventories decreased by 1.5 MMbbls (million barrels) to 239.7 MMbbls on June 22–29. However, the inventories increased by 2,388,000 barrels or 1% YoY (year-over-year).

A Reuters survey estimated that US gasoline inventories could have dropped by 0.8 MMbbls on June 22–29. US gasoline futures rose 0.6% to $2.13 per gallon on July 5 due to the larger-than-expected drop in gasoline inventories. Gasoline and crude oil futures usually move in tandem. Due to bearish factors, WTI crude oil futures fell 1.6% on July 5.

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The iShares US Energy ETF (IYE) fell ~0.24% to $41.5 on July 5. The index is composed of US companies in the energy sector. Nabors Industries (NBR), TechnipFMC (FTI), CNX Resources (CNX), and Rowan Companies (RDC) decreased 2.7%, 2.2%, 2%, and 1.7%, respectively, on July 5. These stocks account for ~1.3% of IYE’s holdings.

US gasoline production and imports 

US gasoline production increased 1.7% to 10,311,000 bpd (barrels per day) on June 22–29. However, production decreased by 54,000 bpd or 0.5% YoY.

US gasoline imports dropped ~34% to 648,000 bpd from June 22–29, 2018. The imports also decreased by 91,000 bpd or 12.3% YoY.

Impact 

US gasoline inventories were ~6.2% above their five-year average for the week ending June 29, which could be bearish for gasoline and oil prices. If gasoline inventories drop below the five-year average, it could be bullish for gasoline and oil prices. If the excess inventories increase, it would be bearish for gasoline and oil prices.

Next, we’ll discuss US gasoline demand.

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