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Will EIA Crude Oil Inventories Affect Crude Oil Prices?

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API crude oil inventory report 

The API (American Petroleum Institute) released its weekly crude oil inventory report on March 15, 2016. The report showed that US crude oil inventory rose by 1.5 MMbbls (million barrels) for the week ending March 11, 2016. The US crude oil inventory rose by 4.4 MMbbls (million barrels) for the week ending March 4, 2016. The API’s crude oil inventory estimates rose for the fifth time in the last six weeks.

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EIA’s crude oil inventory report

The EIA (U.S. Energy Information Administration) will release its weekly oil inventory report on March 16, 2016. Oil traders closely watch the API data, as it gives cues to the EIA’s data. The government agency reported that the US crude oil inventory rose by 3.9 MMbbls to 521.9 MMbbls for the week ending March 4, 2016.

The rise in the crude oil inventory affects storage costs. For more on this, read Crude Oil Storage Costs Rose 9 Times, US Crude Tests New Limits and Record US Crude Oil Inventory Led to a New Storage Space. 

Crude oil inventory estimates 

Current US crude oil inventories exceed the five-year average by 100 MMbbls. They are also 16% more than the 2015 levels during this time of the year and have reached their highest level in the last 80 years. Bloomberg’s survey suggests that crude oil stocks could have risen by 2.5 MMbbls for the week ending March 11, 2016. Reuter’s poll suggests that US crude oil stocks could have risen by 3.4 MMbbls for the week ending March 11, 2016. Rising US crude oil stocks and record inventories could limit the upside for crude oil prices.

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The contango market and record global inventories benefit crude oil tanker companies like Nordic American Tankers (NAT), Frontline (FRO), and Tsakos Energy Navigation (TNP). In contrast, lower crude oil prices affect US oil and gas producers like Ultra Petroleum (UPL), Whiting Petroleum (WLL), Warren Resources (WRES), Bill Barrett (BBG), and Cimarex (XEC). For more information on US energy companies’ financial woes, read US Oil and Gas Companies’ Debt Exceeds $200 Billion and Crude Oil’s Total Cost of Production Impacts Major Oil Producers. 

The ups and downs in crude oil and gas prices impact ETFs and ETNs like the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the iShares U.S. Energy ETF (IYE), the iShares U.S. Oil Equipment & Services ETF (IEZ), the First Trust Energy AlphaDEX Fund (FXN), and the Guggenheim S&P 500 Equal Weight Energy (RYE).

Read the next part of the series to learn more about gasoline and distillate inventories.

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