API crude oil inventory
On February 2, 2016, the API (American Petroleum Institute) will publish its weekly crude oil inventory report. Last week, US crude oil inventory rose by 11.4 MMbbls (million barrels) for the week ended January 22, 2016. It’s the highest crude oil inventory build since 1996. US crude oil inventory at Cushing, Oklahoma, rose by 0.66 MMbbls for the same period.
EIA crude oil inventory data
The API data are followed by the EIA (U.S. Energy Information Administration) weekly petroleum status report. The EIA will release its next report on February 3, 2016. Last week, the EIA reported that US crude oil inventory rose by 8.4 MMbbls to 494.9 MMbbls for the week ended January 22, 2016.
Market surveys from Reuters suggest that US crude oil stocks could rise 4.7 MMbbls for the week ended January 29, 2016. You can read more about gasoline and distillate stocks at Why Gasoline and Distillate Inventories Diverged Last Week. The consensus of rising crude oil inventory will continue to put pressure on oil prices and oil producers. In the next part of the series, we’ll look at the latest OPEC (Organization of the Petroleum Exporting Countries) crude oil production and its effect on the oil market.
In the previous part of this series, we covered how lower oil prices have affected the energy sector and SPY. Lower oil prices also affect the creditworthiness of oil and gas companies. Lower oil prices forecast in 2016 led Standard & Poors, a credit rating agency, to downgrade the ratings for oil companies such as Shell (RDS.A). They also downgraded BP (BP), Eni SpA (E), Repsol, Statoil (STO), and Total (TOT).
Volatility in the oil market also affects ETFs such as the United States Oil Fund (USO), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the First Trust Energy AlphaDEX ETF (FXN), and the Vanguard Energy ETF (VDE).