EIA’s crude oil inventories  

On August 23, 2017, the EIA (U.S. Energy Information Administration) released its weekly crude oil inventory report. It reported that US crude oil inventories fell by 3.3 MMbbls (million barrels) to 463.1 MMbbls between August 11, 2017, and August 18, 2017. Inventories fell 0.7% week-over-week and 29.7 MMbbls or 6% year-over-year. US crude oil inventories are at the lowest level since January 22, 2016.

A Reuters survey estimated that US crude oil inventories would fall 3.5 MMbbls between August 11, 2017, and August 18, 2017. US crude oil (RYE) (VDE) prices rose on August 23, 2017, due to the fall in inventories.

US Crude Oil Inventories Fall in Line with Market Expectations

Higher crude oil (ERY) (ERX) prices have a positive impact on energy producers. The returns of the top energy companies by volume (or shares traded) as of August 23, 2017, are as follows:

  • ExxonMobil (XOM) fell 0.19% to $76.61.
  • Chevron (CVX) rose 0.2% to $106.61.
  • Schlumberger (SLB) fell 0.2% to $63.19.
  • ConocoPhillips (COP) rose 1.2% to $43.69.
  • Marathon Petroleum (MPC) rose 1% to $50.17.

Why US crude oil inventories fell last week 

US refinery crude oil demand fell by 104,000 bpd (barrels per day), or 0.6%, to 17,461,000 bpd between August 11, 2017, and August 18, 2017. Refinery demand rose 782,000 bpd, or 4.6%, in the same period in 2016. Refinery demand hit 17,574,000 bpd for the week ending August 4, 2017, the highest level since 1982.

US crude oil imports rose by 664,000 bpd or 8% to 8,790,000 bpd between August 11, 2017, and August 18, 2017. Imports rose 148,000 bpd, or 1.7%, during the same period in 2016.

A rise in US crude oil imports and production led to the fall in US crude oil inventories between August 11, 2017, and August 18, 2017. The possible rise in US crude oil exports might have also contributed to the fall in US crude oil inventories. A fall in US refinery demand could have limited the fall in US crude oil inventories between August 11, 2017, and August 18, 2017.

Impact of US crude oil inventories 

US crude oil inventories are below the five-year average. Inventories have fallen almost 14% from the peak. An expectation of a fall in US crude oil inventories could benefit crude oil (DWT) (UWT) prices in the coming weeks.

In the next part, we’ll look at why US crude oil production is bearish for crude oil prices.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.

172.31.16.229