uploads///US Change in Inventory

Crude Oil Market: API Data and EIA Data Consensus Diverge

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Jul. 22 2015, Published 8:01 a.m. ET

API stockpile report

On Tuesday, July 21, 2015, the API (American Petroleum Institute) published the weekly crude oil inventory report. The API report showcased that crude oil stocks rose by 2.3 MMbbls (million barrels) for the week ending July 17, 2015. In contrast, crude oil inventories fell by 7.3 MMbbls for the week ending July 10, 2015.

The API inventory report releases ahead of the EIA’s (U.S. Energy Information Administration) weekly crude oil stockpile report. The EIA report is scheduled to release on July 22 at 10:30 AM EST. The government data showed that the crude oil stockpile fell by 4.3 MMbbls to 461.4 MMbbls for the week ending July, 10, 2015.

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EIA inventory estimates

The surveys conducted from a Reuters and Bloomberg project show that crude oil stocks could fall by 2.2 MMbbls and 2.3 MMbbls, respectively, for the week ending July 17, 2015. The surveys of falling crude oil stocks might support crude oil prices.

In contrast, as stated earlier, API data estimates rose in crude oil inventory for the week ending July 17, 2015. This will negatively impact crude oil prices. API data also added that inventories at Cushing, Oklahoma, are also expected to rise by 885,000 barrels for the week ending July 17, 2015. Cushing is the crude oil futures delivery point of NYMEX-traded crude oil. It’s also the largest oil storage hub in the US.

Bloomberg projections show that refinery utilization will remain unchanged at 95.30% for the week ending July 17—compared to the previous week. The latest surveys suggest that the gasoline stockpile is expected to rise by 300,000 barrels to 218.3 MMbbls. Likewise, distillate inventories are expected to rise by 1.8 MMbbls to 143.1 MMbbls in the week ending July 17, 2015. The rising refined product inventory will negatively affect crude oil prices. What about the global inventories?

The recent fall in crude oil prices will put pressure on the performance of upstream producers like Hess (HES), Devon Energy (DVN), and Noble Energy (NBL). These companies account for 12.09% of the Energy Select Sector SPDR ETF (XLE). Their crude oil production mix is more than 46% of their production portfolio. The volatility in crude oil prices also impacts ETFs like XLE and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

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