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Crude Inventories Rose as US Refinery Crude Demand Fell

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US refinery crude oil demand 

The EIA (U.S. Energy Information Administration) reported that US refinery crude oil demand fell by 255,000 bpd (barrels per day) to 16,597,000 bpd between July 29 and August 5.

The refinery demand fell by 1.7% week-over-week and by 2.5% year-over-year. US refineries operated at 92.2% of their operable capacity for the week ending August 5, 2016. The decline in US refinery crude oil demand contributed to the rise in crude oil inventories. For more on US crude oil inventories, read Part three of this series.

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US crude oil imports 

Weekly US crude oil imports fell by 334,000 bpd to 8,404,000 bpd (barrels per day) between July 29 and August 5. Imports fell 3.4% week-over-week. But, they are up by 11% year-over-year.

US crude oil production estimates and impact 

The EIA released its monthly Short-Term Energy Outlook report on August 9, 2016. It reported that US crude oil production will fall by 700,000 bpd in 2016 and 420,000 bpd in 2017. For more on this, read EIA Revises US Crude Oil Production: A Bullish or Bearish Driver?

The expectation of slowing US crude oil production could benefit US crude oil prices. For more on crude oil prices, please read part one of this series. A rise in crude oil prices has a positive impact on oil producers’ earnings such as Stone Energy (SGY) and W&T Offshore (WTI).

Uncertainty in crude oil prices affects funds such as the VelocityShares 3x Long Crude Oil ETN (UWTI), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bear 3x (ERY), and the PowerShares DWA Energy Momentum ETF (PXI).

In the next part of this series, we’ll take a look at gasoline prices.

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