EIA crude oil inventory
The EIA (U.S. Energy Information Administration) published its weekly commercial crude oil, distillate, and gasoline inventory report on Thursday, October 15, 2015. It reported that US crude oil stocks rose by 7.6 MMbbls (million barrels) to 468.6 MMbbls for the week ending October 9, 2015. It’s the highest crude oil inventory rise since April 2015. Last week, the crude oil inventory rose by 3.1 MMbbls to 461 MMbbls for the week ending October 2, 2015. US crude oil stocks also rose for the third consecutive week as of October 9, 2015.
Crude oil inventory estimates
The API (American Petroleum Institute) estimated that the US crude oil inventory could rise by 9.3 MMbbls for the week ending October 9, 2015. However, a market survey from Reuters projected that crude oil stocks could rise by 3 MMbbls for the same period. The better-than-expected inventory rise is weighing on crude oil prices. Crude oil prices fell for the fourth day. Gasoline and distillate stocks fell by 2.6 MMbbls and 1.5 MMbbls for the week ending October 9, 2015.
The rise in crude oil stocks was due to the fall in the crude oil refinery demand. The refinery demand fell due to seasonal maintenance. The crude oil input to refineries fell by 292,000 bpd (barrels per day) to 15.3 MMbpd (million barrels per day) for the week ending October 9, 2015—compared to the previous week. The refinery utilization was at 86% for the same period. It fell by 1.5% from the previous week.
The rise in US crude oil imports also added to the massive crude oil inventory buildup. Crude oil imports rose by 247,000 bpd to 7.3 MMbpd for the week ending October 9, 2015—compared to the previous week. The monthly crude oil imports averaged around 7.3 MMbpd. This is 1.3% lower than the crude oil imports in 2014.
The long-term downward trend of crude oil prices impacts energy producers’ profitability like Murphy Oil (MUR), Marathon Oil (MRO), Noble Energy (NBL), and Newfield Exploration (NFX). These companies’ crude oil production mix is more than 41% of their production portfolio. ETFs like the iShares US Oil & Gas Exploration & Production ETF (IEO) are also impacted by falling crude oil prices. In contrast, ETFs like the ProShares UltraShort Bloomberg Crude Oil ETF (SCO) benefit from lower crude oil prices.