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Crude Oil Inventories Rose despite Oil Demand from US Refineries

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Dec. 4 2020, Updated 10:53 a.m. ET

US refinery crude oil demand 

The EIA (U.S. Energy Information Administration) reported that US refinery crude oil demand rose by 369,000 bpd (barrels per day) to 15,817,000 bpd between October 28 and November 4, 2016. US refinery demand rose 2.4% week-over-week, but fell 0.5% YoY (year-over-year). US refineries operated at 87.1% of their operable capacity in the week ending November 4, 2016.

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US crude oil imports  

US crude oil imports fell by 1,553,000 bpd to 7,442,000 bpd between October 28 and November 4, 2016. Imports fell 17.3% week-over-week and 19.2% YoY.

The rise in US crude oil production would have contributed to the rise in US crude oil inventories between October 28 and November 4, 2016. However, the fall in US crude oil imports and rise in US refinery demand would have limited the rise in US crude oil inventories for the same period.

A fall in exports could have contributed to the rise in inventories. For more on US crude oil inventories, read Part 3 of this series. Read Are US Crude Oil Exports Game Changers for the Crude Oil Market? for more on US crude oil exports.

US crude oil production estimates  

The EIA (U.S. Energy Information Administration) released its STEO (Short-Term Energy Outlook) report on November 8, 2016. It forecast that US crude oil production will average 8.8 MMbpd in 2016 and 8.7 MMbpd in 2017.

The EIA estimated that US crude oil production will average 8.7 MMbpd in 2016 and 8.6 MMbpd in 2017 in its October STEO report. The changes have been due to the changes in re-benchmarking of US crude oil production data.

The expectation of booming US crude oil production could pressure US crude oil prices. For more on crude oil prices, please read Part 1 of this series.

Lower crude oil prices could have a negative impact on oil producers’ earnings like Carrizo Oil & Gas (CRZO), Noble Energy (NBL), Chesapeake Energy (CHK), and Continental Resources (CLR).

The rollercoaster ride in crude oil prices impacts funds such as the VelocityShares 3x Long Crude Oil ETN (UWTI), the Direxion Daily Energy Bull 3x Shares ETF (ERX), the iShares U.S. Energy ETF (IYE), the Vanguard Energy ETF (VDE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the Fidelity MSCI Energy (FENY), and the PowerShares DWA Energy Momentum ETF (PXI).

In the next part of this series, we’ll take a look at gasoline prices.

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