US Gasoline Inventory Rose for the Second Time in 5 Weeks
Decoding the US Crude Oil Inventory Report: Prices Hit 2016 Highs
Gasoline inventory
On April 27, 2016, the EIA (U.S. Energy Information Administration) released its “This Week in Petroleum” report. It reported that the US gasoline inventory rose by 1.6 MMbbls (million barrels) to 241.3 MMbbls between April 15, 2016, and April 22, 2016. The gasoline inventory rose for the second time in the last five weeks. The US gasoline inventory is 6% more than in the same period last year. It’s also higher than the upper end of the five-year range.
Gasoline production, imports, and demand
The EIA added that weekly US gasoline production fell by 231,000 bpd (barrels per day) to 9.5 MMbpd (million barrels per day) for the week ending April 22—compared to the previous week. It’s 2.3% higher than the same period last year. Weekly gasoline imports also rose by 0.10 MMbpd to 0.89 MMbpd for the week ending April 22—compared to the previous week. The four-week average gasoline demand rose by 18,000 bpd to 9.4 MMbpd for the same period. It’s 6% higher than the same period in 2015.
Impact of the rise in the gasoline inventory
The fall in gasoline exports led to the rise in the US gasoline inventory. The rise in the US gasoline inventory has a negative impact on gasoline prices. For more on gasoline prices, read Part 4 of this series.
The recent uptick in gasoline prices benefits US refiners like Valero Energy (VLO), Tesoro (TSO), and Northern Tier Energy (NTI). Likewise, high crude oil prices benefit upstream players like PDC Energy (PDCE), Swift Energy (SFY), and WPX Energy (WPX).
The uncertainty in oil prices impacts ETFs and ETNs like the PowerShares DWA Energy Momentum Portfolio (PXI), the DB Crude Oil Double Short ETN (DTO), the iShares Global Energy ETF (IXC), the iShares U.S. Oil Equipment & Services ETF (IEZ), and the VelocityShares 3x Inverse Crude Oil ETN (DWTI).
In the next part of this series, we’ll look at US distillate inventories.
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