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Will EIA and API Crude Oil Inventories Impact Crude Oil Prices?

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Crude oil prices  

December WTI (West Texas Intermediate) crude oil futures contracts fell 0.8% to $45.5 per barrel in electronic trade at 4:35 AM EST on November 16, 2016. Prices fell due to the API’s (American Petroleum Institute) bearish crude oil inventory report and the strong dollar.

Crude oil prices were near a two-month low due to skepticism around OPEC’s ability to deliver cuts and Donald Trump’s surprise victory. For more on crude oil prices and OPEC’s meeting, read Part 1 of this series.

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API crude oil inventories  

On November 15, 2016, the API released its weekly crude oil inventory report. It reported that US crude oil inventories rose by 3.6 MMbbls (million barrels) from November 4–11, 2016. As a result, crude oil prices pared some gains in post-settlement trade on November 15, 2016.

The API added that Cushing crude oil inventories rose by 1.13 MMbbls from November 4–11, 2016. Read Will Cushing Crude Oil Inventories Support Crude Oil Prices? to learn more.

EIA’s crude oil inventories 

The API’s report on Tuesday will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report on November 16, 2016. The data will be for the week ending November 11, 2016.

For the week ending November 4, the EIA reported that US crude oil inventories rose by 2.4 MMbbls to 485 MMbbls between October 28 and November 4, 2016. Read How Do US Crude Oil Inventories Influence Crude Oil Prices? for a regional breakdown of crude oil inventories.

A Bloomberg survey estimates that US crude oil inventories rose by 1 MMbbls from November 4–11, 2016. If the EIA reports a larger-than-expected rise in inventories, it could pressure crude oil prices. On the other hand, 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 fell 11% from their highs. It could support crude oil prices.

High crude oil prices could have a positive impact on oil and gas producers’ earnings such as Goodrich Petroleum (GDP), Warren Resources (WRES), Apache (APA), Noble Energy (NBL), and Triangle Petroleum (TPLM).

The rollercoaster ride in crude oil prices also impacts ETFs such as the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the iShares Global Energy ETF (IXC), the iShares US Energy ETF (IYE), the Fidelity MSCI Energy ETF (FENY), and the United States Brent Oil ETF (BNO).

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

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