uploads///Crude oil quant data

EIA Could Report Record Crude Oil Inventory Levels


Nov. 20 2020, Updated 5:13 p.m. ET

US crude oil

US crude oil (USO) (OIIL) (USL) (SCO) futures contracts for March delivery closed at $53.20 per barrel on February 14, 2017—0.5% more than the previous closing price.

While OPEC’s production cuts supported oil prices, concerns about rising US crude oil production kept a lid on the gains. In Part 2 of this series, we’ll discuss how oil rigs impact US oil production. The recent rise in the US dollar (UUP) also had a negative impact on oil prices. In Part 4 of this series, we’ll discuss the relationship between the US dollar and crude oil prices. In the trailing week, US crude oil active futures rose 2%.

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API inventories

On February 14, 2017, the API (American Petroleum Institute) reported a buildup of ~9.94 MMbbls (million barrels) in crude oil inventories for the week ending February 10, 2017. The EIA (U.S. Energy Information Administration) will provide inventory data for the week ending February 10, 2017, on February 15, 2017.

If the EIA reports an equally massive buildup in crude oil inventories, levels could hit a record, according to data from the EIA going back 35 years to 1982. In such a scenario, oil prices could test $50.

Key moving averages

Currently, crude oil futures are trading 3.2% above their 100-day moving average. Futures broke below their 20-day moving average on February 13, 2017. However, on February 14, prices moved 0.4% above their 20-day moving average. The 100-day moving average could act as an important downside support for crude oil going forward. However, if the 100-day moving average—at around $51.5 currently—is broken, the $50 level could be at risk.

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Energy ETFs

Crude oil sentiments impact ETFs such as the United States Brent Oil ETF (BNO), the PowerShares DWA Energy Momentum ETF (PXI), the Vanguard Energy ETF (VDE), and the ProShares UltraShort Bloomberg Crude Oil (SCO).

Series focus

In this series, we’ll analyze how fundamental drivers like the rig count, crude oil inventories, and the US dollar impact crude oil prices. We’ll also try to understand what the crude oil futures forward curve and Brent WTI spread might be indicating.

Next, we’ll see how rig counts impact oil prices.


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