API crude oil inventory report
The API (American Petroleum Institute) published its weekly crude oil, gasoline, and distillates stocks report on September 15, 2015. It reported that the US commercial crude oil inventory fell by 3.1 MMbbls (million barrels) for the week ending September 11, 2015. In contrast, the crude oil inventory rose by 2.1 MMbbls for the week ending September 4, 2015.
The API report added that the crude oil inventory at Cushing, Oklahoma, also fell by 1.5 MMbbls for the week ending September 11, 2015. Cushing, Oklahoma, is the largest crude oil storage hub in the US. It’s the delivery point for NYMEX-traded crude oil futures contracts.
Market surveys and impact
The API data is a precursor to the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report. The EIA is scheduled to release its crude oil stockpile report on September 16, 2015. Last week, the government data showed that the crude oil stockpile rose by 2.6 MMbbls to 458 MMbbls for the week ending September 4, 2015.
The preliminary estimates from Reuters suggest that crude oil stocks could be almost flat for the week ending September 11, 2015. In contrast, Bloomberg surveys project that crude oil stocks could rise by 1.75 MMbbls for the same period. Likewise, the distillates inventory is expected to rise by 0.25 MMbbls for the week ending September 11, 2015. In contrast, gasoline stocks are expected to fall by 0.5 MMbbls for the same period. The consensus of the falling crude oil inventory could support crude oil prices.
The current crude oil stocks are 27.70% more than the crude oil inventory at 358.59 MMbbls over the same period in 2015. The crude oil stocks are also at an 80-period high during this period of the year. The record crude oil inventory could negatively influence crude oil prices.
The roller coaster ride of crude oil prices impacts oil and gas producers like Chevron (CVX), Apache (APA), and Hess (HES). They account for 16.25% of the Energy Select Sector SPDR ETF (XLE). These companies’ crude oil production mix is greater than 49% of their production portfolio. Energy ETFs like XLE and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) are also affected by the volatility in crude oil prices.