EIA stockpile draws down
Yesterday, the EIA (U.S. Energy Information Administration) published its weekly stockpile report. EIA data showed that US crude oil inventories fell by 6.8 MMbbls (million barrels) to 470.6 MMbbls for the week ending June 5, 2015—compared to the decline of 1.9 MMbbls for the week ending May 29.
Platts and Bloomberg surveys showed that the oil stockpile could fall by 1.6 MMbbls and 1.5 MMbbls, respectively, for the week ending June 5, 2015. On June 9, 2015, API (American Petroleum Institute) data showed that the oil stockpile fell by 6.7 MMbbls for the week ending June 5, 2015. The worse-than-expected decline supported crude oil prices. WTI (West Texas Intermediate) rose by 3.30% week-to-date on the consensus of the declining stockpile. The current stockpile is 21% more than the levels last year. This means that oil prices could experience downward pressure.
The US refinery demand increased by 169,000 bpd (barrels per day) to 16.6 MMbpd (million barrels per day) in the week ending June 5, 2015. During the same period, refinery utilization increased by 0.9% to 93.5%—compared to 92.6% for the week ending May 26, 2015. The rising refinery demand supports oil prices. As a result, the weekly crude oil stockpile fell.
The decline in crude oil imports also supported the inventory decline. US oil imports dropped by 750,000 bpd to 6.6 MMbpd in the week ending June 5, 2015. Monthly oil imports averaged around 7 MMbpd—2.3% lower than the levels in 2014.
Gasoline inventories fell by 2.9 MMbbls—against the market estimates of a decline of 3.9 MMbbls for the week ending June 5, 2015. Distillate inventories rose by 0.9 MMbbls—compared to the market’s expected increase of 38,000 barrels for the week ending June 5, 2015.
The recent surge in crude oil prices widened WTI and Brent crude oil prices. Broader WTI and Brent crude oil prices benefit US refineries like Phillips 66 (PSX), Marathon Petroleum (MPC), and Valero Energy (VLO). Combined, these companies account for 7.57% of the Energy Select Sector SPDR ETF (XLE).
Energy ETFs like XLE and the SPDR Oil and Gas ETF (XOP) also benefit from rising crude oil prices.