API’s crude oil inventories
The API (American Petroleum Institute) will release its weekly petroleum status report on July 25, 2017. A market survey estimates that US crude oil inventories would have fallen by 2.9 MMbbls (million barrels) on July 14–21, 2017. The expectation of a fall in US crude oil inventories could help crude oil (RYE) (VDE) (IEZ) prices.
Gasoline and distillate inventories
A market survey also estimates that US gasoline and distillate inventories would have fallen by 1.2 MMbbls and 0.67 MMbbls, respectively, on July 14–21, 2017. A fall in product inventories supports gasoline and diesel futures.
Higher crude oil and gasoline prices have a positive impact on refiners and oil producers such as Noble Energy (NBL), Bill Barrett (BBG), Cobalt International Energy (CIE), Western Refining (WNR), and Marathon Petroleum (MPC).
US crude oil imports and Saudi Arabia
The EIA (U.S. Energy Information Administration) estimates that four-week average US crude oil imports rose by 30,000 bpd (barrels per day) to 7.841 MMbpd (million barrels per day) on July 7–14, 2017—1.6% lower than the same period in 2016.
US crude oil imports have fallen 4.5% year-to-date. US crude oil imports from Saudi Arabia are at a seven-year low at 524,000 bpd for the week ending July 14, 2017. Average US crude oil imports from Saudi Arabia over the past six weeks fell by 450,000 bpd or 34%—compared to the first six weeks of 2017. The fall in imports contributed to the fall in US crude oil inventories despite steady US crude oil production and near-record refinery demand. The rise in US crude oil exports in 2017 could have also led to the fall in US crude oil inventories.
EIA’s inventory report
The API’s report will be followed by the EIA’s (U.S. Energy Information Administration) weekly crude oil inventory report at 10:30 AM EST on July 26, 2017.
The expectation of a fall in US crude oil imports from Saudi Arabia and high refinery demand could drain US inventories. Inventories have fallen by ~45 MMbbls in the last 15 weeks. A massive fall in US crude oil and product inventories could support crude oil and fuel prices.
In the next part, we’ll look at how Saudi Arabia’s crude oil production and exports impact crude oil prices.