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US Oil Production and Gasoline Inventories Pressure Oil Futures

PART:
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Part 2
US Oil Production and Gasoline Inventories Pressure Oil Futures PART 2 OF 7

US Crude Oil Inventories Are 0.6% below Their All-Time High

Crude oil prices 

June WTI (West Texas Intermediate) crude oil (SCO) (BNO) (FXN) futures contracts rose 0.8% to $51.3 per barrel in electronic trading at 5:20 AM EST on April 20, 2017. Prices are near two-week lows. However, broader markets like the S&P 500 (SPY) and the Dow Jones are near all-time highs. Bullish momentum in the US stock market could support oil demand and oil prices. The US is the largest oil consumer.

Moves in crude oil prices impact oil and gas producers’ earnings like ExxonMobil (XOM), Northern Oil & Gas (NOG), Hess (HES), and Triangle Petroleum (TPLM). For more on crude oil prices and drivers, read Part 1 of this series.

US Crude Oil Inventories Are 0.6% below Their All-Time High

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EIA’s crude oil inventories 

The EIA (U.S. Energy Information Administration) reported that US crude oil inventories fell by 1 MMbbls (million barrels) to 532.3 MMbbls on April 7–14, 2017. US crude oil inventories fell 0.2% week-over-week, but rose 5% year-over-year.

A market survey estimated that US crude oil inventories would have fallen by 1.5 MMbbls on April 7–14, 2017. Crude oil (PXI) (USL) (DIG) futures fell due to the less-than-expected fall in US crude oil inventories on April 19, 2017. For more on crude oil prices, read Part 1 in this series. In Part 4, we’ll see why US crude oil inventories fell.

Impact of US crude oil inventories  

US crude oil inventories hit 535.5 MMbbls for the week ending March 31, 2017—the highest level ever. Inventories are 0.6% below their peak level. They’re also above their five-year range. US crude oil inventories have risen by ~53.5 MMbbls, or ~10%, in the last 16 weeks. Crude oil prices are down ~3.5% during this period. Near-record crude oil inventories could pressure crude oil (IYE) (XES) prices. US crude oil inventories are the second-biggest bearish catalyst for crude oil prices after US crude oil production.

In the next part of this series, we’ll take a look at US crude oil production.

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