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.
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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.