Why US Crude Oil Could Stay above $50
US crude oil
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What impacted US crude oil?
The US refinery utilization rate jumped to 83.2% in the week ended September 15, 2017, compared with 77.7% one week previously. Before Hurricane Harvey, the refinery utilization rate was about 96.6%. The fall in US refinery utilization rate was the main reason behind the build-up in US commercial crude oil stockpiles since the week ended September 1, 2017.
The revival in the refinery utilization rate could reduce US commercial crude oil stockpiles over the next few weeks. But US crude oil production reached 9.51 million barrels per day last week—20 thousand barrels per day below the level we saw before Hurricane Harvey. But consolidation in the US oil rig count could limit the upside in US crude oil production.
These bullish drivers could help US crude oil prices to stay above the $50 mark.
On September 21, 2017, natural gas (UNG) October futures fell 4.8% and closed at $2.95 per MMBtu (million British thermal units). Between September 14–21, 2017, natural gas active futures fell 4%.
On September 21, 2017, the EIA (US Energy Information Administration) reported the natural gas inventory data for the week ended September 15, 2017. Natural gas inventories rose 97 Bcf, compared with the market’s expected rise of 93 Bcf.
Natural gas inventories were 2% above their five-year average. One week before, the difference was 1.3%. The increase of the spread over the five-year average could be the reason for the fall in natural gas prices in the last trading session.