API crude oil inventories
The API (American Petroleum Institute) released its weekly crude oil inventory report on April 19, 2016. It estimated that the US crude oil inventory rose by 3.1 MMbbls (million barrels) between April 8, 2016, and April 15, 2016. The API added that Cushing crude oil stocks fell by 0.24 MMbbls for the same period. To learn more about Cushing crude oil stocks, read Cushing Crude Oil Stocks Could Support Crude Oil Prices.
EIA’s crude oil inventories
Oil traders closely watch API data—a precursor to the EIA’s (U.S. Energy Information Administration) weekly petroleum status report. The EIA is scheduled to release its weekly crude inventory report on April 20 at 10:30 AM EST. Nationwide crude oil stocks 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. The wide contango market and record US crude oil inventories support crude oil tanker companies like Frontline (FRO) and DHT Holdings (DHT).
The rise in crude oil inventories impacts 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
A Reuters’ poll suggests that US crude oil inventories rose by 2.1 MMbbls for the week ending April 15, 2016—compared to the previous week. Platts estimates that the crude oil inventory rose by 1.6 MMbbls for the same period.
Estimates of rising US crude oil inventories could add more pain for crude oil prices. Low crude oil prices negatively impact crude oil producers like QEP Resources (QEP), Synergy Resources (SYRG), and Halcon Resources (HK). For more information on US energy companies’ financial woes, read North American Oil and Gas Producers’ Debt Rose in 2015 and Crude Oil’s Total Cost of Production Impacts Major Oil Producers.
The uncertainty in crude oil prices impacts ETFs and ETNs like the United States Oil Fund (USO), the DB Crude Oil Double Short ETN (DTO), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), and the United States Brent Oil Fund (BNO).
Read the next part of this series to learn about gasoline and distillate inventories.