Decoding the US Crude Oil Inventory: How Does It Impact Oil Prices?
Gasoline stocks
The EIA (U.S. Energy Information Administration) released its weekly petroleum status report on March 30, 2016. It reported that US gasoline stocks fell by 2.5 MMbbls (million barrels) to 242.6 MMbbls between March 18, 2016, and March 25, 2016. Industry surveys projected that the gasoline stocks could have fallen by 2.1 MMbbls for the same period. US gasoline inventories are 6% more than the gasoline stocks in the same period in 2015. They’re also higher than the five-year upper range.
Gasoline production, imports, and demand
The EIA reported that US gasoline production fell by 253,000 bpd (barrels per day) to 9.4 MMbpd (million barrels per day) for the week ending March 25—compared to the previous week. This is 3.2% more than during the same period in 2015. US gasoline imports rose by 0.10 MMbpd to 0.51 MMbpd for the same period. The gasoline demand fell by 259,000 bpd to 9.2 MMbpd for the same period. The US gasoline demand is 2% more than the same period in 2015.
Impact of falling gasoline inventories
The increase in gasoline exports led to a fall in gasoline inventories. A fall in gasoline stocks supports gasoline prices. US refiners like Tesoro (TSO) and Northern Tier Energy (NTI) benefit from high gasoline prices. High crude oil prices also benefit oil producers like Comstock Resources (CRK), Triangle Petroleum (TPLM), Energy XXI (EXXI), and Goodrich Petroleum (GDP).
Oil prices also impact ETFs and ETNs like the Direxion Daily Energy Bull 3x Shares ETF (ERX), the PowerShares DWA Energy Momentum (PXI), the United States Brent Oil (BNO), and the United States 12 Month Oil (USL).
Read the next part of the series to learn more about heating oil and diesel fuel prices.
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