Crude oil prices
September WTI (West Texas Intermediate) crude oil futures contracts rose by 3.3% and closed at $40.83 per barrel on August 3, 2016. Brent crude oil futures also rose by 3.1% and closed at $43.1 per barrel.
Prices rose due to an unexpected draw in US gasoline inventories. ETFs like the United States Oil ETF (USO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) rose by 3.9% and 7.4%, respectively, on the same day.
US crude oil inventories
The EIA (U.S. Energy Information Administration) released its weekly crude oil inventory report on August 3, 2016. It reported that US crude oil inventories rose by 1.4 MMbbls (million barrels) from July 22–29, 2016. It added that gasoline inventories fell by 3.3 MMbbls for the same period.
We’ll look more at US crude oil inventories and their regional breakdown in Part 3 of this series. For more on gasoline inventories read Part 8 of this series. The API (American Petroleum Institute) estimated that US crude oil inventories fell by 1.3 MMbbls from July 22–29, 2016.
Crude oil volatility index
The CBOE crude oil volatility index fell by 2.3% to 44.64 on August 3, 2016. It hit its highest level in the last four months at 45.7 on August 2, 2016.
Volatility in crude oil prices impacts oil and gas producers’ earnings such as Swift Energy (SFY), WPX Energy (WPX), and Triangle Petroleum (TPLM). It also impacts funds such as the iShares Global Energy ETF (IXC), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bear 3x (ERY), and the iShares US Oil Equipment & Services ETF (IEZ).
In this series, we’ll look at US crude oil production and imports, refinery demand, and US gasoline and distillate prices and inventories. We’ll start by looking at the US crude oil price movement during early morning trading on August 4, 2016.