API crude oil stocks
On April 19, 2016, the API (American Petroleum Institute) will release its weekly crude oil inventory report. The API reported that the US crude oil inventory rose by 6.22 MMbbls (million barrels) for the week ending April 8, 2016—compared to the previous week. In contrast, the API estimated that Cushing crude oil stocks fell by 1.9 MMbbls for the same period. Genscape, an energy consulting company, estimated that Cushing crude oil stocks fell by 860,000 barrels between April 8, 2016, and April 15, 2016. To learn more, read Cushing Crude Oil Stocks Could Support Crude Oil Prices.
Nationwide crude oil inventories and estimates
The API data are followed by the EIA’s (U.S. Energy Information Administration) weekly petroleum status report on Wednesday. The EIA will release its weekly crude oil inventory report on April 20, 2016. The US crude oil inventory rose by 6.6 MMbbls to 536.5 MMbbls for the week ending April 8, 2016—compared to the previous week. It’s the highest level ever for the US crude oil inventory. A Reuters poll suggests that US crude oil inventories rose by 2.1 MMbbls between April 8, 2016, and April 15, 2016.
Impact of record nationwide crude oil inventories
Estimates of the rising US crude oil inventory will put pressure on crude oil prices. US crude oil inventories are 11% more than they were during the same period in 2015. Similarly, record US crude oil inventories could also weigh on crude oil prices. They’re also 100 MMbbls more than their five-year average.
The contango market and record US crude oil inventory benefit crude oil tanker companies like DHT Holdings (DHT), Frontline (FRO), and Tsakos Energy Navigation (TNP). Multiyear low crude oil prices impact oil producers like Northern Oil & Gas (NOG) and Comstock Resources (CRK).
The roller coaster ride in crude oil prices impacts ETFs like the iShares U.S. Oil Equipment & Services ETF (IEZ), the VanEck Vectors Oil Services (OIH), and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).
Next, we’ll discuss non-Organization of the Petroleum Exporting Countries crude oil production and how it impacts the crude oil market.