uploads///US crude oil inventories

US Crude Oil Inventories Revert to January 2016 Levels

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Sep. 10 2017, Updated 1:08 p.m. ET

Crude oil inventories

The EIA (U.S. Energy Information Administration) estimates that US crude oil inventories fell by 5.3 MMbbls (million barrels), or 1.2%, to 457.7 MMbbls between August 18 and 25, 2017, compared with 37.5 MMbbls (7.6%) in the same period in 2016.

A market survey estimated that US crude oil inventories are down 1.8 MMbbls between August 18 and 25, 2017. US crude oil (XLE) (XOP) prices fell on August 30, 2017, despite the larger-than-expected fall in inventories.

Lower crude oil (IXC) (IYE) prices impact oil and gas producers such as Carrizo Oil & Gas (CRZO), PDC Energy (PDCE), Cobalt International Energy (CIE), and Continental Resources (CLR).

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US crude oil inventories by region

The EIA divides the US into five storage regions. Changes in crude oil inventories between August 18 and 25, 2017, were as follows:

  • the East Coast – fell by 0.7 MMbbls to 16.5 MMbbls
  • the Midwest – fell by 0.9 MMbbls to 141.2 MMbbls
  • the Gulf Coast – fell by 4.2 MMbbls to 230.2 MMbbls
  • the Rocky Mountain region – fell by 0.2 MMbbls to 21.7 MMbbls
  • the West Coast – rose by 0.7 MMbbls to 48.1 MMbbls

Historical averages 

US crude oil inventories rose by 2.27 MMbbls or 0.5% during the same period in 2016. The five-year average addition of US crude oil inventories for this period of the year is 1 MMbbls. Inventories fell by 3.3 MMbbls between August 11 and 18, 2017.

Impact of US crude oil inventories

US crude oil inventories are at their lowest level since January 15, 2016. Inventories have fallen 75.6 MMbbls, or 14%, in the last 20 weeks. They are also inside the five-year average range. A fall in US crude oil inventories could support crude oil (USO) (UCO) prices in the coming weeks. In the next part, we’ll look at how a fall in refinery demand is bearish for crude oil prices.

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