16 May

OECD’s Crude Oil Inventories Are near a 5-Month Low

WRITTEN BY Gordon Kristopher

OECD’s crude oil inventories

The EIA (U.S. Energy Information Administration) estimates that OECD’s (Organization for Economic Cooperation and Development) crude oil inventories fell by 5.74 MMbbls (million barrels) to 3,027 MMbbls in April 2017—compared to March 2017. OECD’s oil inventories fell 0.2% month-over-month, but rose 0.6% year-over-year. OECD crude oil inventories are near a five-month low. The fall in oil inventories is bullish for crude oil (VDE) (IEZ) (XES) (USO) prices. For more on crude oil prices, read Part 1 of this series.

OECD’s Crude Oil Inventories Are near a 5-Month Low

OPEC’s estimate

OPEC’s (Organization of the Petroleum Exporting Countries) Monthly Oil Market report stated that OECD countries’ oil inventories fell by 36 MMbbls to 3,013 MMbbls in March 2017—compared to the previous month. OECD’s inventories were 1 MMbbls lower than the same period in 2016.

Oil inventories in 2017 and 2018

OECD’s oil inventories averaged 2,860 MMbbls in 2015 and 3,024 MMbbls in 2016. The EIA expects OECD’s oil inventories to average 2,992 MMbbls and 3,041 MMbbls in 2017 and 2018, respectively.

Impact of OECD’s crude oil inventories

The fall in OECD’s oil inventories in 2017 could support crude oil prices in 2017. Higher crude oil prices have a positive impact on crude oil and natural gas producers’ revenues such as Carrizo Oil & Gas (CRZO), Marathon Oil (MRO), Cobalt International Energy (CIE), and Continental Resources (CLR).

Let’s analyze Iraq’s crude oil production in the next part of this series.

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