Will US Crude Oil Inventories Pressure Oil Prices?
Crude oil futures
August US crude oil futures contracts also fell 0.5% to $46.2 per barrel in electronic trading at 2:15 AM EST on the day. August US crude oil futures contracts will expire on July 20, 2017. Prices fell due to the API’s (American Petroleum Institute) bearish crude oil inventory report.
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API’s crude oil inventories
On July 18, 2017, the API released its weekly crude oil and gasoline inventory report. It reported that US crude oil inventories had risen 1.6 MMbbls (million barrels) from July 7 to 14, 2017.
A market survey had estimated that US crude oil inventories would fall 3 MMbbls from July 7 to 14. The unexpected rise in US crude oil inventories pressured US crude (XLE) (XOP) oil prices in post-settlement trading on July 18. Cushing crude oil inventories rose 0.6 MMbbls from July 7 to 14, according to the API.
The API expected gasoline inventories to fall 5.4 MMbbls from July 7 to 14. In contrast, US distillate inventories fell 2.8 MMbbls during the same period.
EIA’s crude oil inventories
The EIA (U.S. Energy Information Administration) will release its Weekly Petroleum Status Report at 10:30 AM EST on July 19, 2017. A better-than-expected fall in US crude oil and gasoline stockpiles could help crude oil prices. US crude oil inventories are expected to fall due to the fall in Saudi Arabia’s exports to the United States.
In the next part of this series, we’ll analyze how Saudi Arabia’s crude oil production and exports affect crude oil prices.