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Will Crude Oil Prices React to the EIA’s Crude Oil Inventory Report?

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Part 2
Will Crude Oil Prices React to the EIA’s Crude Oil Inventory Report? PART 2 OF 6

Gasoline and Distillate Stocks Could Influence Crude Oil Prices

API gasoline and distillate stocks

The API (American Petroleum Institute) published its weekly crude oil inventory report on March 8, 2016. The report highlighted that Cushing crude oil stocks rose by 0.7 MMbbls (million barrels) for the week ending March 4, 2016. It estimated that gasoline stocks rose by 2.1 MMbbls for the same period. In contrast, distillate stocks fell by 0.1 MMbbls for the same period.

Gasoline and Distillate Stocks Could Influence Crude Oil Prices

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EIA’s gasoline and distillate stocks 

The EIA (U.S. Energy Information Administration) reported that gasoline stocks fell by 1.5 MMbbls to 255 MMbbls for the week ending February 26, 2016. In contrast, distillate stocks rose by 2.9 MMbbls to 163.6 MMbbls for the same period. Cushing crude oil stocks rose by 1.2 MMbbls to 66.3 MMbbls for the week ending February 26, 2016.

Gasoline and distillate stock estimates 

Market surveys project that gasoline stocks could have fallen by 1.4 MMbbls for the week ending March 4, 2016. Similarly, distillate stocks might have fallen by 0.04 MMbbls for the same period. The fall in gasoline and distillate stocks suggests the rise in demand or fall in supplies. This would support crude oil prices.

The recent uptick in crude oil prices benefits oil producers like Ultra Petroleum (UPL), Whiting Petroleum (WLL), QEP Resources (QEP), Cimarex (XEC), Apache (APA), Hess (HES), Energy XXI (EXXI), and PDC Energy (PDCE). On the other hand, low oil prices and steady or higher product prices benefit oil refiners like Tesoro (TSO) and Northern Tier Energy (NTI). For more on US energy companies’ financial woes, read US Oil and Gas Companies’ Debt Exceeds $200 Billion.

The roller coaster ride in oil prices impacts ETFs and ETNs like the iShares Global Energy ETF (IXC), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the iShares U.S. Energy ETF (IYE), the iShares U.S. Oil Equipment & Services ETF (IEZ), the Direxion Daily Energy Bull 3x Shares ETF (ERX), and the VelocityShares 3x Long Crude Oil ETN (UWTI).

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