API stockpile data
The crude oil market didn’t react to the data released by the API (American Petroleum Institute) on August 11, 2015. The API data showed that crude oil stocks fell by 0.847 MMbbls (million barrels) for the week ending August 7, 2015. Likewise, oil stocks fell by 2.4 MMbbls for the week ending July 31, 2015. The API reports added that inventories at Cushing, Oklahoma, also fell by 34,000 barrels for the week ending August 7—compared to the previous week. Cushing is the largest crude oil storage hub in the US. It’s the futures delivery point of NYMEX crude oil futures.
EIA inventory estimates
The API data is the precursor to the EIA’s (U.S. Energy Information Administration) crude oil stockpile report. The EIA report is expected to release on August 12, 2015, at 10:30 AM EST. The government report showed that the US commercial crude oil inventory fell by 4.4 MMbbls to 455.3 MMbbls for the week ending July 31, 2015.
For the week ending August 7, 2015, market surveys from Reuters to Platt’s project that crude oil inventories could fall between 1.8 MMbbls and 2.1 MMbbls, respectively.
Like crude oil, the gasoline inventory is also expected to fall by 0.647 MMbbls for the same period. In contrast, distillates inventories are estimated to rise by 1.25 MMbbls for the week ending August 7, 2015.
The consensus of the falling inventory implies that crude oil supplies are falling or demand is rising. The fall in inventories could be due to the fall in US crude oil imports. It could also be due to the rise in refinery demand during this period. The consequence is that this could support crude oil prices.
The crude oil stockpiles are 24% more than the level of 365.61 MMbbls in 2014. However, crude oil stocks are also near an 80-year high during this period of the year. This might negatively affect crude oil prices.
Falling crude oil prices impact upstream players’ margins like Murphy Oil (MUR) and Hess (HES). They account for 5.78% of the Energy Select Sector SPDR ETF (XLE). However, falling oil prices benefit oil refiners like Philips 66 (PSX). In contrast, they negatively affect oil and gas ETFs like XLE and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).