Crude oil prices
On October 22, 2015, WTI (West Texas Intermediate) crude oil prices closed at $45.38 per barrel. Prices were 1.0% lower compared with crude oil prices on October 15, 2015. On October 22, Brent crude oil prices closed at $48.08 per barrel. Prices were 1% lower compared with crude oil prices on October 15.
Factors influencing crude oil prices
The EIA (U.S. Energy Information Administration) released the crude oil inventory report on October 21, 2015. The report states that crude oil inventories rose by 8 million barrels for the week ending October 16, 2015. Analysts had forecast that inventory build would be 3.9 million barrels for the week ending October 16, 2015, but the inventory build was more than their expectations.
The main reasons for the plunge in crude oil prices are crude inventory builds decreasing crude oil consumption in China, OPEC’s (Organization of the Petroleum Exporting Countries) decision not to cut production levels, and concerns about future energy demand.
The key factor influencing the fall in crude prices is massive stockpiles. However, positive economic data from China, Japan, and the United States could boost crude oil prices.
Impact of low crude oil prices
The fall in oil prices is negative for oil producers such as Hess Corporation (HES), Apache (APA), Diamondback Energy (FANG), Murphy Oil (MUR), Cimarex Energy (XEC), ConocoPhillips (COP), and Occidental Petroleum (OXY). These companies will have to to sell their products at lower prices.
On the other side, it is beneficial for the refiners due to decreased operational costs via access of inputs at the lower price. Refiners such as Marathon Petroleum (MPC), Tesoro (TSO), and Phillips 66 (PSX), will benefit from lower crude oil prices.