API crude oil inventories
On September 13, 2016, the API (American Petroleum Institute) released its weekly crude oil inventory report. It reported that US crude oil inventories rose by 1.4 MMbbls (million barrels) between September 2 and September 9, 2016. The less-than-expected increase in crude oil inventories supported crude oil prices on September 14. For more on crude oil prices, read the part one and part four of this series. High crude oil prices positively impact the earnings of oil and gas producers like Synergy Resources (SYRG), Exco Resources (XCO), Comstock Resources (CRK), and Triangle Petroleum (TPLM).
EIA’s crude oil inventories
API’s report will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report for the week ending September 9, 2016, on September 14 at 10:30 AM EST.
For the week ending September 2, 2016, the EIA reported that US crude oil inventories had fallen by 14.5 MMbbls (million barrels) to 511.4 MMbbls between August 26 and September 2, 2016. For a regional breakdown of crude oil inventories, read US Crude Oil Inventories Push Crude Oil Prices to 2-Week Highs.
A Reuters survey estimates that US crude oil inventories rose 3.8 MMbbls September 2-9, 2016. A larger-than-expected rise in inventories reported by the EIA could pressure crude oil prices. On the other hand, if the EIA’s oil inventory report follows API data, and rises less than estimates, we could see oil prices move higher.
Impact of US crude oil inventories
US crude oil inventories hit an all-time high of 543.6 MMbbls in the week ending April 29, 2016. High global and US crude oil inventories could pressure crude oil prices. Lower crude oil prices negatively impact the earnings of oil and gas producers like Synergy Resources (SYRG), Exco Resources (XCO), Comstock Resources (CRK), and Triangle Petroleum (TPLM).
The roller coaster ride in crude oil prices also impacts ETFs and ETNs such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the United States Oil ETF (USO), the ProShares Ultra Oil & Gas (DIG), and the United States Brent Oil ETF (BNO).
In the next part of this series, we’ll look at the how gasoline inventories impact crude oil prices.