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US Crude Oil Inventories Could Reach Record Levels

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API’s crude oil inventories 

On February 22, 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 risen from February 10–17, 2017. A rise in crude oil inventories could pressure US crude oil (XOP) (PXI) (XLE) prices. However, crude oil prices are trading near a 19-month high. Meanwhile, the S&P 500 (SPY), S&P 500 Index (SPX-INDEX), Dow Jones (DJIA-INDEX), and NASDAQ Composite Index (COMP-INDEX) are near all-time highs. The bullish momentum in the US stock market could support oil demand and oil prices. For more on crude oil prices, read Part 1 of this series.

Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Chevron (CVX), Northern Oil & Gas (NOG), Stone Energy (SGY), Marathon Oil (MRO), and Triangle Petroleum (TPLM).

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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 for the week ending February 17, 2017. The report will be released on February 23, 2017, at 10:30 AM EST.

For the week ending February 10, 2017, the EIA reported that US crude oil inventories rose by 9.5 MMbbls (million barrels) to 518.1 MMbbls from February 3–10, 2017. US crude oil inventories are at an all-time high. Read US Crude Oil Inventories Hit an All-Time High for more details.

Impact of US crude oil inventories   

US crude oil inventories have risen by ~40 MMbbls or 8.2% in the last seven weeks. Crude oil prices fell ~2% during this period. Record crude oil inventories could pressure crude oil (IEZ) (FENY) (BNO) (RYE) prices.

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

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