uploads/2017/01/image062-2.png

Will API Crude Oil Inventories Boost Crude Oil Prices?

By

Updated

Crude oil prices 

February WTI (West Texas Intermediate) crude oil (USO) (UCO) (XOP) (ERY) (IEZ) (RYE) (USL) (ERY) futures contracts rose 0.4% to $52.7 per barrel in electronic trade at 1:05 AM EST on January 18, 2017. Prices are trading near 18-month highs.

Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Noble Energy (NBL), Goodrich Petroleum (GDP), Apache (APA), Northern Oil & Gas (NOG), and Triangle Petroleum (TPLM).

API’s crude oil inventories  

On January 18, 2017, the API (American Petroleum Institute) will release its weekly crude oil inventory report. A market survey estimated that US crude oil inventories could have fallen by 0.9 MMbbls (million barrels) from January 6–13, 2017. Genscape, a market intelligence company, estimated that Cushing crude oil inventories could haven fallen by 0.8 MMbbls for the same period. A fall in crude oil inventories could support US crude oil prices. For more on crude oil prices, read Part 1 of this series.

On January 10, 2017, the API reported that US crude oil inventories rose by 1.5 MMbbls between December 30 and January 6, 2017.

EIA’s crude oil inventories 

The API’s report will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report on January 19, 2017, at 10:30 AM EST. The data will be for the week ending January 13, 2017.

For the week ending January 6, 2017, the EIA reported that US crude oil inventories rose by 4.1 MMbbls (million barrels) to 483.1 MMbbls. For more details, read US Crude Oil Inventories at 30-Year Seasonal Record High.

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, they have fallen 11.1% from the all-time highs. Falling inventories could support crude oil prices. Crude oil prices rose ~15.2% during this period.

In the next part of this series, we’ll see how OPEC’s crude oil production impacts crude oil prices.

More From Market Realist