Crude oil prices
WTI (West Texas Intermediate) crude oil (XOP) (PXI) (XLE) (ERX) futures contracts for March delivery rose 0.2%. They were trading at $53.11 per barrel in electronic trade at 12:30 AM EST on February 7, 2017. Prices are trading near an 18-month high. Meanwhile, the S&P 500 (SPY), (SPX-INDEX), (DJIA-INDEX), and (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.
API’s crude oil inventories
On February 7, 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 by 2,380,000 barrels between January 27, 2017, and February 3, 2017. A rise in crude oil inventories could pressure US crude oil prices.
Lower crude oil prices have a negative impact on oil and gas producers’ earnings like Chevron (CVX), Comstock Resources (CRK), Northern Oil & Gas (NOG), and Triangle Petroleum (TPLM).
On January 31, 2017, the API reported that US crude oil inventories rose by 5.8 MMbbls (million barrels) from January 20–27, 2017.
EIA’s crude oil inventories
Tuesday’s API report will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report for the week ending February 3, 2017. The report will be released on February 8, 2017, at 10:30 AM EST.
For the week ending January 27, 2017, the EIA reported that US crude oil inventories rose by 6.5 MMbbls to 494.8 MMbbls. Read How US Crude Oil Inventories Limited Upside for Crude Oil Prices for a regional breakdown of crude oil inventories.
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 9% from the all-time highs. Falling inventories could support crude oil prices. Crude oil (IEZ) (FENY) (BNO) (RYE) prices rose 17.2% during this period.
In the next part of this series, we’ll look at OPEC’s crude oil production and how it impacts the crude oil market.