X
<

Will the Crude Oil Futures Rally Be Short-Lived?

PART:
1 2 3 4 5
Part 2
Will the Crude Oil Futures Rally Be Short-Lived? PART 2 OF 5

US Crude Oil Inventories: Largest Fall since September 2016

Crude oil prices

August WTI (West Texas Intermediate) crude oil (XLE) (XOP) (PXI) futures contracts fell 0.30% to $45.30 per barrel in electronic trading at 6:25 AM EST on July 13, 2017. Prices fell due to oversupply concerns. OPEC thinks that demand for its crude oil will fall 60,000 bpd (barrels per day) in 2018 compared to 2017. For more on this, read the previous part of this series.

Lower crude oil prices have a negative impact on oil producers such as Hess (HES), Bonanza Creek Energy (BCEI), Carrizo Oil & Gas (CRZO), and Comstock Resources (CRK).

US Crude Oil Inventories: Largest Fall since September 2016

Interested in BNO? Don't miss the next report.

Receive e-mail alerts for new research on BNO

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

EIA’s crude oil inventories

On Wednesday, July 12, 2017, the EIA (U.S. Energy Information Administration) released its weekly petroleum status report. It reported that US crude oil inventories fell 7.5 MMbbls (million barrels) to 495.3 MMbbls between June 30, 2017, and July 7, 2017. It’s the biggest weekly fall since September 2016. Inventories fell 1.5% week-over-week but rose 0.80% year-over-year.

A Reuters survey estimated that US crude oil inventories could have fallen 2.9 MMbbls between June 30, 2017, and July 7, 2017. US crude oil prices rose on July 12, 2017, due to the massive fall in nationwide crude oil inventories. Inventories fell 6.3 MMbbls from June 23–30, 2017.

US crude oil inventories by region

The EIA divides the United States into five storage regions. Let’s assess the changes in crude oil inventories between June 30, 2017, and July 7, 2017.

  • East Coast: rose 0.20 MMbbls to 16.2 MMbbls
  • Midwest: fell 2.5 MMbbls to 149.2 MMbbls
  • Gulf Coast: fell 6.0 MMbbls to 252.9 MMbbls
  • Rocky Mountain: flat at 22.5 MMbbls
  • West Coast: rose 0.80 MMbbls to 54.6 MMbbls 

Impact of US crude oil inventories

US crude oil inventories have fallen for the 13th time in the last 15 weeks by ~38.0 MMbbls, or 7.5%. Saudi Arabia may cut its crude oil exports to the United States. That could drain US inventories and support crude oil (IEZ) (XES) (BNO) prices.

In the next part, we’ll look at US crude oil production and its estimates for 2018.

X

Please select a profession that best describes you: