U.S. Gasoline Inventory Tanks, Even While Crude Supply Surges

Total gasoline inventories decreased by 5.1 million barrels last week and are now in the lower half of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged more than 8.7 million barrels a day over the past four weeks, up about 3.4% from the same period a year ago.

Distillate inventories rose by 1.6 million barrels last week but remain below the lower limit of the average range. Distillate product supplied averaged more than 3.7 million barrels a day over the past four weeks, down by 0.9% when compared with the same period last year. Distillate production totaled 4.7 million barrels a day last week, roughly the same as production in the prior week.

Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 6.3 million barrels in the week ending March 21, together with a drop of 2.8 million barrels in gasoline supplies and an increase of 267,000 barrels in distillate supplies. For the same period, Platts estimated a rise of 2.6 million barrels in crude inventories, a decline of 1.8 million barrels in gasoline inventories and a drop of 1 million barrels in distillate inventories.

A stronger than expected increase in U.S. durable goods orders on Wednesday morning had lifted the crude price by about 0.5% from its close on Tuesday night, but the strong build in crude outweighed the drop in gasoline inventories after the EIA’s report came out. Gasoline production is expected to pick up as refineries complete the maintenance and turnaround activities in the next few weeks.

West Texas Intermediate (WTI) crude prices closed at $99.19 on Tuesday and were trading up about 0.7% before the EIA report at around $100.10 a barrel. The WTI price slipped to around $99.80 shortly after the report was released.

For the past week, crude imports averaged more than 7.6 million barrels a day, up by 308,000 barrels a day from the previous week. Refineries were running at 86% of capacity, with daily input of 15.1 million barrels a day, up 141,000 barrels over the previous week’s average.

According to AAA, the current average pump price per gallon of regular gasoline is $3.535, up from $3.528 a week ago and $3.419 a month ago. Last year a gallon of regular cost $3.658 on average in the United States. Prices should begin to level off and perhaps even drop a little in the next few weeks as maintenance and turnarounds bring refineries back online.

The United States Oil ETF (NYSEMKT: USO) was up about 0.6%, at $35.98 in a 52-week range of $30.79 to $39.54.

The United States Gasoline ETF (NYSEMKT: UGA) was up about 0.4%, at $58.50, in a 52-week range of $53.35 to $63.34.

The United States Brent Oil ETF (NYSEMKT: BNO) was up about 0.4%, at $42.83 in a 52-week range of $36.88 to $45.05.