Analyzing US Crude Oil Inventories and Production
Crude oil futures
August West Texas Intermediate crude oil (SCO) (XLE) (XOP) futures contracts rose 1.7% to $45.8 per barrel in electronic trade at 1:30 AM EST on July 12, 2017. Prices rose due to the API’s (American Petroleum Institute) bullish crude oil inventory report.
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US crude oil production estimates
On July 11, 2017, the EIA (U.S. Energy Information Administration) released its monthly Short-Term Energy Outlook report. The EIA estimates that US crude oil production would average 9.9 MMbpd (million barrels per day) in 2018—1% or 100,000 barrels per day lower than the previous estimates. The downward revision in US crude oil production’s outlook supported oil prices on July 11, 2017.
API’s crude oil inventories
The API released its weekly crude oil inventory report on July 11, 2017. It estimates that US crude oil inventories fell by 8.1 MMbbls (million barrels) on June 30–July 7, 2017. A Reuters survey estimates that US crude oil inventories would have fallen by 2.9 MMbbls during the same period. A massive fall in US crude oil inventories supported US crude (USO) (UCO) oil prices in post-settlement trade on July 11, 2017.
The API added that Cushing crude oil inventories fell by 2 MMbbls on June 30–July 7, 2017.
The API also added that gasoline inventories fell by 0.8 MMbbls during the same period. However, US distillates inventories rose by 2.1 MMbbls during the same period.
EIA’s crude oil inventories
The EIA will release its weekly crude oil inventory at 10:30 AM EST on July 12, 2017. A large-than-expected fall in US crude oil and gasoline inventories could support crude oil prices this week.
In the next part of this series, we’ll analyze how Saudi Arabia’s crude oil production and exports impact crude oil prices.