US Crude Oil Inventories Hit a New All-Time High

Crude oil prices 

April West Texas Intermediate crude oil (ERX) (USO) (UCO) futures contracts were flat at $54.45 per barrel in electronic trading at 12:40 AM EST on February 24, 2017. Prices are trading at a 19-month high. Likewise, broader markets like the S&P 500 (SPY), Dow Jones, and Nasdaq are near all-time highs. Bullish momentum in the US stock market could support oil demand and oil prices.

Higher crude oil prices can have a positive impact on the earnings of oil and gas producers like Noble Energy (NBL), Carrizo Oil & Gas (CRZO), PDC Energy (PDCE), and Continental Resources (CLR). For more on crude oil prices and drivers, read part one of this series.

US Crude Oil Inventories Hit a New All-Time High

EIA’s crude oil inventories 

The EIA (U.S. Energy Information Administration) reported that US crude oil inventories rose by 0.6 MMbbls (million barrels) to 518.7 MMbbls between February 10 and February 17, 2017. US crude oil inventories rose 0.1% week-over-week and 9% year-over-year. US crude oil inventories are at an all-time high.

Wall Street Journal survey estimated that US crude oil inventories would have risen by 3.4 MMbbls between February 10 and February 17, 2017. The less-than-expected increase in US crude oil inventories supported crude oil (DIG) (VDE) (FENY) prices on February 23, 2017. However, crude oil prices pared gains in the latter half of the day on February 23, 2017. US crude oil inventories are above their five-year range. They have also been keeping a lid on crude oil prices. For more on crude oil prices, read part one in this series. In part four, we’ll see why US crude oil inventories rose.

Impact of US crude oil inventories 

US crude oil inventories have risen ~40.6 MMbbls, or 8.3%, in the last eight weeks. Crude oil prices are up ~2.2% during this period. However, record crude oil inventories could put a lid on crude oil (IEZ) (RYE) prices.

In the next part of this series, we’ll take a look at US crude oil production.