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US Crude Oil Inventories Are near January 2016 Levels

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EIA’s crude oil inventories 

The EIA (U.S. Energy Information Administration) released its weekly crude oil (UWTI) (IXC) (BNO) inventory report on September 28, 2016. It reported that US crude oil inventories fell by 1.9 MMbbls (million barrels) to 502.7 MMbbls from September 16–23, 2016. US crude oil inventories are near January 2016 levels.

A Reuters survey estimated that US crude oil inventories could have risen 3 MMbbls from September 16–23, 2016. The unexpected drop in weekly crude oil inventories supported crude oil prices on September 28, 2016. For more on crude oil prices, please read Part 1 and Part 2 of this series. In Part 5, we’ll see why US crude oil inventories fell.

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US crude oil inventories by region

The EIA divides the US into five storage regions. Below are the changes in crude oil inventories for these regions from September 16–23, 2016:

  • East Coast – fell 3.3 MMbbls to 14.2 MMbbls
  • Midwest – fell 0.4 MMbbls to 146.6 MMbbls
  • Gulf Coast – fell 0.7 MMbbls to 264.7 MMbbls
  • Rocky Mountain – fell 0.1 MMbbls to 25.2 MMbbls
  • West Coast – rose 2.4 MMbbls to 51.9 MMbbls

Impact of US crude oil inventories 

Nationwide crude oil inventories hit an all-time high of 543.6 MMbbls in the week ending April 29, 2016. For the week ending September 23, 2016, US crude oil inventories were 9.8% higher than in the same period in 2015. High US crude oil inventories pressure crude oil prices. To learn more, read US Crude Oil Prices Tested 3-Month Lows.

High US crude oil inventories and a contango market benefit oil tankers like DHT Holdings (DHT) and Tsakos Energy Navigation (TNP).

Lower crude oil prices have a negative impact on oil producers’ earnings like Cobalt International Energy (CIE), Warren Resources (WRES), and Stone Energy (SGY).

The rollercoaster ride in crude oil prices impact ETFs such as the Energy Select Sector SPDR (XLE), the DB Crude Oil Double Short ETN (DTO), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the SPDR S&P Oil & Gas Equipment & Services ETF (XES).

In the next part of this series, we’ll take a look at US crude oil production.

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