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Will API Inventory Data Signal a Blood Bath in the Crude Oil Market?

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API inventory data  

On Wednesday, November 3, 2015, the API (American Petroleum Institute) will release the weekly crude oil inventory report. Last week, the API published that crude oil stocks rose by 4.1 MMbbls (million barrels) for the week ending October 23, 2015. In contrast, the distillate and gasoline inventory fell by 2.6 MMbbls and 0.66 MMbbls for the same period. US crude oil stocks rose for the sixth consecutive week.

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EIA’s oil inventory data 

The API data are followed by the US government’s inventory report. The EIA (U.S. Energy Information Administration) will publish the weekly petroleum status report on November 4, 2015. Last week, US crude oil stocks rose by 3.4 MMbbls to 480 MMbbls for the week ending October 23, 2015. In contrast, the US distillate and gasoline inventory fell by 3 MMbbls and 1.1 MMbbls for the same period.

EIA’s oil inventory estimates

Market surveys suggest that crude oil stocks could rise by 2.3 MMbbls for the week ending October 30, 2015. In contrast, gasoline stocks are expected to fall by 1.1 MMbbls to 217.5 MMbbls for the same period. Likewise, distillate stocks are estimated to fall by 2 MMbbls to 140.1 MMbbls for the same period.

The rise in the crude oil inventory implies that the supply is rising or demand is falling. The rising crude oil inventory will push crude oil prices lower. However, falling refined products stocks will push crude oil prices higher. The volatility in the oil market impacts ETFs like the PowerShares DWA Energy Momentum ETF (PXI) and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO). It also impacts oil producers like Apache (APA), EOG Resources (EOG), ConocoPhillips (COP), and Pioneer Natural Resources (PXD). These companies’ oil output mix is more than 41% of their total production.

Read the next part of the series to learn about OPEC’s (Organization of the Petroleum Exporting Countries) production and how it impacts the oil market.

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