API inventory data
The API (Amercian Petroleum Institute) is expected to release the weekly crude oil, distillate, and gasoline inventory report on Tuesday, June 9, 2015. Last week, API data showed that the US stockpile increased by 1.8 MMbbls (million barrels) for the week ending May 29. API data is closely watched by oil traders ahead of the EIA’s (U.S. Energy Information Administration) weekly stockpile report. It’s scheduled to release on June 10, 2015.
Last week, the EIA reported that the oil stockpile fell by 1.9 MMbbls to 477.4 MMbbls. The current stockpile is 23% more than the level of 389.5 MMbbls last year. Market consensus suggests that weekly crude oil inventories are expected to decline by 1.7 MMbbls for the week ending June 5, 2015. Over the same period, weekly distillates stocks are expected to increase by 1.167 MMbbls—compared to an increase of 3.773 MMbbls the previous week. For the week ending June 5, gasoline inventories are estimated to rise by 0.533 MMbbls. The gasoline stockpile fell by 0.334 MMbbls for the week ending May 29. Declining crude oil inventories imply that demand is increasing or supply is decreasing. This support crude oil prices.
In contrast, US crude oil production increased marginally for the week ending May 29, 2015. This is negative for crude oil prices.
Oil and gas exploration and production companies like Murphy Oil (MUR), Northern Oil and Gas (NOG), and Apache (APA) are negatively impacted by lower crude oil prices. They have a crude oil production mix that’s more than 50% of their total production. These companies account for 4.84% of the Energy Select Sector SPDR ETF (XLE).
ETFs like XLE and the SPDR Oil and Gas ETF (XOP) also declined marginally in yesterday’s trade—in line with crude oil’s price direction.