API crude oil stocks
On November 17, 2015, the API (American Petroleum Institute) will release its weekly crude oil, gasoline, and distillates stocks report. It reported that crude oil stocks rose by 6.3 MMbbls (million barrels) for the week ending November 6, 2015. Likewise, the crude oil inventory rose by 2.8 MMbbls for the week ending October 30, 2015. Crude oil stocks might have increased due to rising imports and rising US production.
EIA’s crude oil stocks
The API data are followed by the EIA’s (U.S. Energy Information Administration) Weekly Petroleum Status report. The report is scheduled to release on November 18, 2015. Last week, crude oil stocks rose by 4.2 MMbbls (million barrels) to 487 MMbbls for the week ending November 6, 2015. Market surveys project that crude oil stocks could rise by 1.8 MMbbls for the week ending November 13, 2015. Currently, crude oil stocks are 29% more than 378 MMbbls for the same period in 2014. The consensus of rising crude oil stocks and record inventory will weigh on crude oil prices.
On the other hand, gasoline stocks fell by 2.2 MMbbls for the week ending November 6, 2015. US distillates inventories rose by 0.4 MMbbls compared to the expected fall by 0.91 MMbbls for the same period.
Meanwhile, US crude oil prices lost more than 60% in since June 2014. The catastrophic fall in the prices impacts super majors’ earnings like Shell (RDS.A), BP (BP), ExxonMobil (XOM), and Chevron (CVX). These companies’ cumulative earnings in the first nine months of 2015 fell almost 70% compared to 2014. However, these companies paid dividends of more than 10%, or $28 billion, to shareholders in the depressed energy market compared to 2014. These companies could pay dividends until 2017 to lure investors.
The roller coaster ride in the oil and gas market impact ETFs like the PowerShares DWA Energy Momentum ETF (PXI) and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).