Crude oil prices
WTI (West Texas Intermediate) crude oil (RYE) (VDE) (SCO) futures contracts for June delivery fell 1.5% to $48.31 per barrel in electronic trade at 6:15 AM EST on May 18, 2017. Prices are near a two-week high.
Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Noble Energy (NBL), Warren Resources (WRES), Chevron (CVX), Hess (HES), and QEP Resources (QEP). For more on crude oil prices and drivers, read Part 1 of this series.
EIA’s crude oil inventories
The EIA (U.S. Energy Information Administration) reported that US crude oil inventories fell by 1.8 MMbbls (million barrels) to 520.8 MMbbls on May 5–12, 2017. US crude oil inventories fell 0.3% week-over-week, but rose 2.2% year-over-year.
A market survey estimated that US crude oil inventories would have fallen by 2.3 MMbbls on May 5–12, 2017. US crude oil inventories fell for the sixth straight week. They fell by 14.7 MMbbls or ~3% during this period. As a result, US crude oil (IXC) (IYE) (RYE) futures rose on May 17, 2017. For more on crude oil prices, read Part 1 in this series. In Part 4, we’ll see why US crude oil inventories fell.
Impact of US crude oil inventories
US crude oil inventories hit 535.5 MMbbls for the week ending March 31, 2017—the highest level ever. They’re also above the five-year range. US crude oil prices fell ~4% in the past month. Near-record crude oil inventories could pressure crude oil prices. US crude oil inventories and US crude oil production are key bearish drivers for crude oil prices in 2017.
In the next part of this series, we’ll take a look at US crude oil production.