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Will EIA’s Crude Oil Inventories Data Follow API Data?

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Crude oil prices  

November WTI (West Texas Intermediate) crude oil futures contracts rose 1.4% to $51 per barrel in electronic trade at 5:20 AM EST on October 19, 2016. For more on crude oil prices, read part one of this series.

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API’s crude oil inventories  

On October 18, 2016, the API (American Petroleum Institute) released its weekly crude oil inventory report. It reported that US crude oil inventories fell by 3.9 MMbbls (million barrels) between October 7 and October 14, 2016. As a result, crude oil prices rose in the post-settlement trade on October 18, 2016.

The API added that Cushing crude oil inventories fell by 2.0 MMbbls from October 7 to October 14, 2016. To learn more, read Why Cushing Crude Oil Inventories Could Push Prices Higher.

EIA’s crude oil inventories   

The API report will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report for the week ending October 14 on October 19, 2016, at 10:30 AM EST.

For the week ending October 7, 2016, the EIA reported that US crude oil inventories rose by 4.9 MMbbls (million barrels) to 474 MMbbls between September 30 and October 7. For more on US crude oil inventories, read Why US Crude Oil Inventories Are Near October 2015 Levels.

A Reuters survey estimates that US crude oil inventories rose by 2.7 MMbbls between October 7–14, 2016. If the EIA reports a larger-than-expected rise in inventories, it could pressure crude oil prices. In contrast, an unexpected fall in US crude oil inventories could support crude oil prices.

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. Since then, inventories have fallen 12.8% from the all-time highs. The decrease in inventories could support crude oil prices. High crude oil prices could have a positive impact on the earnings of oil and gas producers like Comstock Resources (CRK) and Triangle Petroleum (TPLM).

Volatility in oil prices also affects ETFs and ETNs such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the DB Crude Oil Double Short ETN (DTO), the Fidelity MSCI Energy (FENY), the iShares U.S. Energy ETF (IYE), and the United States Brent Oil ETF (BNO).

In the next part of this series, we’ll look at how gasoline inventories impact crude oil prices.

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