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Will the Crude Oil Futures Rally Be Short-Lived?

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Part 5
Will the Crude Oil Futures Rally Be Short-Lived? PART 5 OF 5

US Distillate Inventories Rose for the 3rd Time in 5 Weeks

US distillate inventories 

The EIA (U.S. Energy Information Administration) reported that US distillate inventories rose 3.1 MMbbls (million barrels) to 153.6 MMbbls between June 30, 2017, and July 7, 2017. Inventories rose for the third time in the last five weeks, rising 2.1% week-over-week and 0.40% year-over-year.

A market survey estimated US distillate inventories might have risen 1.1 MMbbls between June 30, 2017, and July 7, 2017. US diesel futures fell 0.20% to $1.47 per gallon on Wednesday, July 12, 2017. Prices fell due to the larger-than-expected rise in US distillate inventories. US diesel and crude oil futures diverged on July 12, 2017. Crude oil (SCO) (BNO) (IEZ) futures rose on Wednesday, July 12, 2017.

US Distillate Inventories Rose for the 3rd Time in 5 Weeks

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Moves in crude oil prices impact the earnings of US crude oil producers such as Comstock Resources (CRK), Western Refining (WNR), Marathon Petroleum (MPC), and Northern Oil & Gas (NOG).

US distillate production, imports, and demand

US distillate production rose 249,000 bpd (barrels per day) to 5.4 MMbpd (million barrels per day) between June 30, 2017, and July 7, 2017. Production rose 4.8% week-over-week and 6.3% year-over-year.

US distillate imports rose 17,000 bpd to 125,000 bpd between June 30, 2017, and July 7, 2017. Imports rose 15.7% week-over-week and 120.0% year-over-year.

Distillate demand fell 464,000 bpd to 3.9 MMbpd between June 30, 2017, and July 7, 2017. Imports fell 10.7% week-over-week but rose 25.8% year-over-year.

Impact 

US distillates inventories are at the upper level of the five-year range. Inventories have risen 3.2 MMbbls in the last ten weeks. High distillate inventories would pressure diesel and crude oil prices.

For more on crude oil price forecasts, read Analyzing Hedge Funds’ Net Long Position on US Crude Oil.

You may also want to read Why Traders Are Tracking Key Crude Oil Drivers This Summer and OPEC and Non-OPEC Meeting Could Drive Crude Oil Futures to learn more about crude oil.

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