The EIA’s crude and refined product inventory data
On July 30, the U.S. Energy Information Administration (or EIA) released crude and refined product inventory data for the week ending July 25. Crude oil inventories decreased ~3.7 million barrels. This was the fifth consecutive drop and almost double analysts’ forecast of a ~1.8 million barrel decline.
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Crude inventories continue to decline as a result of strong demand from refineries. For the week ended July 25, the EIA reported that refineries were operating at 93.5% capacity—0.3% lower than last week, but still reaching 16.6 million barrels per day.
Oil prices dropped last week
Despite the considerable decrease in crude inventories, oil prices have been in a downward trend this entire week. WTI crude oil prices closed at $98.40 per barrel on 31 July—a decline of ~2% compared to the previous day’s market close of $100.27 per barrel.
Factors contributing to a decline in oil prices
Key companies affected
Lower oil prices hurt the margins of oil-weighted companies like Oasis Petroleum (OAS), Hess Corporation (HES), Chevron (CVX), and ExxonMobil (XOM). Most of these companies are components of the Energy Select Sector SPDR ETF (XLE).
Gasoline and distillates
While crude inventories have considerably fallen, gasoline and distillates have seen positive additions.
The following part of this series discusses U.S. demand trends for diesel and gasoline.