US Crude Oil Inventories and Exports Impact Oil Prices
Crude oil prices
US crude oil (UCO) (IEZ) (XES) futures contracts for August delivery rose 0.2% and were trading at $43.48 per barrel in electronic trade at 1:25 AM EST on June 27, 2017. Prices are near a ten-month low or August 2016 levels. US crude oil prices have fallen 15.8% in the past year.
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API’s crude oil inventories
On June 20, 2017, the American Petroleum Institute is scheduled to release its weekly crude oil inventories report for the week ending June 23, 2017.
Preliminary surveys estimate that US crude oil inventories would have fallen by 2.2 MMbbls (million barrels) on June 16–23, 2017. A better-than-expected fall in inventories might support crude oil (RYE) (VDE) prices. However, an unexpected build could weigh on oil prices. Lower crude oil prices have a negative impact on oil producers like Carrizo Oil & Gas (CRZO), Cobalt International Energy (CIE), and Continental Resources (CLR).
US crude oil export
US crude oil inventories are ~100 MMbbls above their five-year average. Even the rise in US crude oil exports by nine times since 2014 didn’t draw down US crude oil inventories. The EIA (U.S. Energy Information Administration) estimated that US crude oil exports averaged 517,000 barrels for the week ending June 16, 2017—compared to 71,000 barrels for the week ending May 16, 2014. For US crude oil exports, the 52-week moving average is at 647,000 barrels. The massive rise in US crude oil exports will add to global crude oil glut. As a result, it would pressure crude oil prices.
High floating storage and high global crude oil inventories would also pressure crude oil prices in the short term.
Next, we’ll look at how Iran impacts crude oil prices.