EIA’s Crude Oil Inventories Might Surprise Traders This Week

API’s crude oil inventories 

On April 11, 2017, the API (American Petroleum Institute) released its weekly crude oil inventory report. It reported that US crude oil inventories fell by 1.3 MMbbls (million barrels) between March 31, 2017, and April 7, 2017. The fall in crude oil inventories supported US crude oil (IXC) (IYE) (ERX) prices in post-settlement trade on April 11, 2017. Prices are trading near a six-week high.

Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Hess (HES), PDC Energy (PDCE), Cobalt International Energy (CIE), and Continental Resources (CLR).

API data showed a cumulative build of ~37.9 MMbbls in the last 15 weeks. The API added that Cushing crude oil inventories fell by 0.36 MMbbls between March 31, 2017, and April 7, 2017. For more on crude oil prices and its drivers, read Part 1 and 2 of this series.

EIA’s Crude Oil Inventories Might Surprise Traders This Week

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 April 12, 2017. The data will be for the week ending April 7, 2017.

For the week ending March 31, 2017, the EIA reported that US crude oil inventories rose by 1.6 MMbbls to 535.5 MMbbls—the highest level ever. Read US Crude Oil Inventories Hit a New Record for more information.

Impact of US crude oil inventories  

A market survey estimates that US crude oil inventories would have risen by 0.1 MMbbls between March 31, 2017, and April 7, 2017. If the EIA reports a larger-than-expected rise in inventories, it could pressure crude oil (BNO) (VDE) (ERY) prices. It could overshadow OPEC’s output cut deal in the short term. In contrast, if it reports a surprise draw, it could support oil prices.

In the next part of this series, we’ll see how gasoline inventories impact crude oil prices.