API crude oil inventories
The API (American Petroleum Institute) released its weekly crude oil inventories report on July 6, 2016. It highlighted that US crude oil inventories fell by 6.7 MMbbls (million barrels) for the week ending July 1, 2016—compared to the previous week.
Bloomberg surveys estimate that US crude oil inventories fell by 2.5 MMbbls for the same period. The decrease in crude oil inventories will benefit crude oil prices. For more on crude oil prices, read the previous part of the series.
EIA’s crude oil inventories
API data are followed by the EIA’s (U.S. Energy Information Administration) weekly petroleum status report. The EIA will release its weekly crude oil inventory report for the week ending July 1 on July 7, 2016, at 10:30 AM EST. It reported that US crude oil inventories fell by 4.1 MMbbls to 526.6 MMbbls for the week ending June 24—11.6% more than the same period in 2015.
Impact of US crude oil inventories
US crude oil inventories hit an all-time high of 543.6 MMbbls for the week ending April 29, 2016. Near-record US crude oil inventories could limit the upside for crude oil prices.
The ups and downs in crude oil prices impact oil and gas producers like Swift Energy (SFY), PDC Energy (PDCE), and Sanchez Energy (SN). It also impacts ETFs and ETNs like the Fidelity MSCI Energy (FENY) and the Direxion Daily Energy Bear 3x (ERY).
In the next part of this series, we’ll look at the crude oil market’s bullish drivers.