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How Will API’s Crude Oil Inventories Impact Crude Oil Prices?

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API crude oil inventories  

The API (American Petroleum Institute) will release its weekly crude oil inventory report on August 23, 2016.

Market surveys suggest that US crude oil inventories fell by 825,000 barrels from August 12–19, 2016. The decrease in crude oil inventories will benefit US crude oil prices. High crude oil prices positively impact the earnings of oil and gas producers such as Synergy Resources (SYRG) and Sanchez Energy (SN). For more on prices, read part one of this series. On August 16, 2016, API reported that US crude oil inventories fell by one MMbbls (million barrels) between August 5 and August 12, 2016.

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EIA’s crude oil inventories  

Tuesday’s API report will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report on Wednesday. It will release its crude oil inventory report for the week ended August 19, 2016, on August 24, 2016, at 10:30 AM EST.

On August 17, 2016, the EIA reported that US crude oil inventories fell by 2.5 MMbbls (million barrels) to 521.1 MMbbls from August 5–12, 2016. For a regional breakdown of crude oil inventories, read US Crude Oil Inventories Supported Crude Oil Prices.

Impact of US crude oil inventories  

US crude oil inventories hit an all-time high of 543.6 MMbbls for the week ended April 29, 2016. High global and US crude oil inventories could pressure US crude oil prices. Lower crude oil prices impact the earnings of oil and gas exploration and production companies such as Synergy Resources (SYRG) and Sanchez Energy (SN).

The ups and downs in oil prices also affect ETFs and ETNs such as the United States Oil ETF (USO), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bear 3x (ERY), the ProShares Ultra Bloomberg Crude Oil (UCO), and the United States Brent Oil ETF (BNO).

In the next part, we’ll take a look at Cushing crude oil inventories and how they impact crude oil prices.

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