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Crude Oil Inventory Report: API Data and Market Surveys Conflict

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Crude oil inventory

The EIA (U.S. Energy Information Administration) will publish the weekly crude oil inventory report on Wednesday, June 3, 2015. Last week, the US commercial crude oil stockpile fell by 2.8 MMbbls (million barrels) to 479.4 MMbbls for the week ending May 22.

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API data versus market surveys

The API (American Petroleum Institute) released its weekly stockpile estimates on June 2, 2015. The data showed that crude oil inventories increased by 1.8 MMbbls for the week ending May 29, 2015. Last week, the API reported that the oil inventories increased by 1.3 MMbbls for the week ending May 22. However, EIA data reported a decline in inventories during the same period.

Reuters’ surveys suggest that the crude oil stockpile will decline by 1.7 MMbbls in the week ending May 29, 2015. Over the same period, if the EIA conflicts the API data like last week, it means that crude oil inventories could decline. Declining inventories support crude oil prices. The EIA report is watched closely by oil traders because it signals the supply and demand balance. The current stockpiles are at the highest level since 1930. The current stockpiles are 23% more than the levels in 2014.

For the past year, OPEC (Organization of the Petroleum Exporting Countries) pumped more crude oil than its collective output of 30 MMbpd (million barrels per day). OPEC’s output was 31.2 MMbpd in May 2015. Oil prices can’t outsize oversupply sentiments in the long term.

Oil exploration and production companies like Kosmos Energy (KOS), Rosetta Resources (ROSE), and Continental Resources (CLR) benefit from increasing crude oil prices. They account for 3.66% of the SPDR Oil and Gas ETF (XOP). Energy ETFs like the Energy Select Sector SPDR ETF (XLE) and XOP also benefit from rising crude oil prices.

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