API’s crude oil inventories
On April 4, 2017, the API (American Petroleum Institute) released its weekly crude oil inventory report. It reported that US crude oil inventories fell by 1.8 MMbbls (million barrels) from March 24–31, 2017. The fall in crude oil inventories supported US crude oil (ERY) (ERX) (SCO) prices in post-settlement trade on April 4, 2017. Prices are trading at a one-month high. Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Hess (HES), Northern Oil & Gas (NOG), and Triangle Petroleum (TPLM).
API data showed a cumulative build of 39.2 MMbbls in the last 14 weeks. The API added that Cushing crude oil inventories rose by 1.34 MMbbls from March 24–31, 2017. A rise in Cushing crude oil inventories could pressure oil prices. For more on crude oil prices and its drivers, read Part 1 and 2 of this series.
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 5, 2017. The data will be for the week ending March 31, 2017.
For the week ending March 24, 2017, the EIA reported that US crude oil inventories rose by 0.9 MMbbls to 534 MMbbls—the highest level ever. Read US Crude Oil Inventories Hit a New Record: What’s Next? for more information.
Impact of US crude oil inventories
A Wall Street Journal survey estimates that US crude oil inventories would have fallen by 0.2 MMbbls from March 24–31, 2017. If the EIA reports a larger-than-expected fall in inventories, it could support crude oil (BNO) (RYE) prices. In contrast, if it reports a surprise rise, it could pressure oil prices. It could overshadow OPEC’s output cut deal in the short term.
In the next part of this series, we’ll see how gasoline inventories impact crude oil prices.
The EIA estimated that four-week average US gasoline demand rose by 210,000 bpd (barrels per day) to 9,312,000 bpd from March 17–24, 2017.
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