Gasoline and Heating Oil Futures Increase Amid Decreasing Inventories

Strategic Insights -

Following bullish inventory reports, gasoline and heating oil futures rebounded from recent plunges, pulling crude oil prices higher. The American Petroleum Institute's weekly survey revealed a significant 5.5 million bbl drop in product inventories, exceeding traders' expectations. The market responded positively, with gasoline futures rising 1.56 cents/gal to 52.65 cents/gal, and heating oil futures increasing 1.06 cents to close at 49.54 cents/gal.

Key Takeaways:

  • Gasoline futures increased 1.56 cents/gal to 52.65 cents/gal on the New York Mercantile Exchange (Nymex) due to decreasing inventories.
  • Heating oil futures rose 1.06 cents to close at 49.54 cents/gal, while crude oil futures increased 8-11 cents/bbl to about $17/bbl for January through March 1995 delivery.
  • January natural gas futures decreased 5.4 cents to $1.714/MMBtu due to mild winter weather.
  • The American Petroleum Institute's weekly survey showed a 5.5 million bbl drop in product inventories, exceeding traders' expectations.
  • Product inventories have decreased 18.4 million bbl from a year ago, and reformulated gasoline (RFG) stocks need to increase by about 50% from current levels to provide a comfortable cushion.
  • Inventory buildups in RFG appeared to slow last week, with total RFG stocks rising 4.8 million bbl to 43.8 million bbl for the week ended Dec. 9.

Statistics:

  • Gasoline futures increased by 1.56 cents/gal to 52.65 cents/gal.
  • Heating oil futures rose by 1.06 cents to 49.54 cents/gal.
  • Crude oil futures increased by 8-11 cents/bbl to about $17/bbl for January through March 1995 delivery.
  • January natural gas futures decreased by 5.4 cents to $1.714/MMBtu.
  • The American Petroleum Institute's weekly survey showed a 5.5 million bbl drop in product inventories.
  • Product inventories have decreased by 18.4 million bbl from a year ago.
  • Reformulated gasoline (RFG) stocks need to increase by about 50% from current levels.
  • Total RFG stocks rose by 4.8 million bbl to 43.8 million bbl for the week ended Dec. 9.

Sources:

  • [1] American Petroleum Institute's weekly survey.
  • [2] Tom Curtis of Pegasus Econometric Group.
  • [3] Energy Information Administration.
  • [4] New York Mercantile Exchange (Nymex).
  • [5] International Petroleum Exchange.