API’s Crude Oil Inventories: Boon or Bane for Oil Prices?

Crude oil prices  

July WTI (West Texas Intermediate) crude oil (RYE) (VDE) (UCO) futures contracts fell 0.96% and were trading at $50.64 per barrel in electronic trade at 6:20 AM EST on May 23, 2017. Prices are near a one-month high ahead of OPEC’s meeting.

Higher crude oil prices have a positive impact on oil and gas producers’ earnings such as Hess (HES), Denbury Resources (DNR), and Goodrich Petroleum (GDP). For more on crude oil prices, read Part 1 of this series.

API’s Crude Oil Inventories: Boon or Bane for Oil Prices?

API’s crude oil inventories  

On May 23, 2017, the API (American Petroleum Institute) will release its weekly crude oil inventory report. A market survey estimates that US crude oil inventories could have fallen by 2.3 MMbbls (million barrels) on May 12–19, 2017. A fall in crude oil inventories could support US crude oil (USL) (PXI) (XES) prices.

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 for the week ending May 19, 2017. The report will be released on May 24, 2017, at 10:30 AM EST. US crude oil inventories fell in the last six weeks. As a result, crude oil prices rose 2.4% in the last four weeks.

US crude oil inventories 

US crude oil inventories hit 535.5 MMbbls for the week ending March 31, 2017—the highest level ever. Inventories are 2.7% below their peak level. US crude oil prices have fallen ~7.2% in the last three months. Near-record crude oil inventories could pressure crude oil prices, which could delay rebalancing the crude oil market despite the production cut deal.

In the next part of this series, we’ll see how OPEC and Russia’s crude oil production impacts crude oil prices.