EIA’s crude oil inventories  

The EIA (U.S. Energy Information Administration) released its weekly crude oil (UWTI) (IXC) (ERY) (BNO) (RYE) (DTO) inventory report on October 5, 2016. It reported that US crude oil inventories fell 3 MMbbls (million barrels) to 499.7 MMbbls between September 23 and September 30, 2016. US crude oil inventories have fallen 26.2 MMbbls since August 26, 2016. They are now near January 2016 levels.

US Crude Oil Inventories Are Down 26 Million Barrels in 5 Weeks

A Reuters survey estimated that US crude oil inventories could have risen 2.6 MMbbls between September 23 and September 30, 2016. The unexpected drop in weekly crude oil inventories supported crude oil prices on October 5, 2016. For more on crude oil prices, please read part one and part two of this series. In part five, we’ll see why US crude oil inventories fell.

US Crude Oil Inventories Are Down 26 Million Barrels in 5 Weeks

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 23 to September 30:

  • East Coast: a rise of 1.2 MMbbls to 15.4 MMbbls
  • Midwest: a rise of 1.1 MMbbls to 147.7 MMbbls
  • Gulf Coast: a fall of 4.3 MMbbls to 260.4 MMbbls
  • Rocky Mountain: a rise of 0.4 MMbbls to 25.6 MMbbls
  • West Coast: a fall of 1.3 MMbbls to 50.6 MMbbls 

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. For the week ending September 30, 2016, US crude oil inventories were 8.3% higher than in the corresponding 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), Teekay Tankers (TNK), and Tsakos Energy Navigation (TNP). Lower crude oil prices could have a negative impact on the earnings of oil producers like Warren Resources (WRES) and Stone Energy (SGY).

The ups and downs in crude oil prices impact ETFs such as the Energy Select Sector SPDR (XLE), 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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