Crude oil futures
December US crude oil (UWT) (DWT) (DBO) futures contracts fell 0.25% to $52.35 per barrel in electronic exchange at 2:00 AM EST on Wednesday, October 25, 2017. Prices fell due to the surprise rise in US crude oil inventories reported by the API (American Petroleum Institute) the previous day. US crude oil prices are at a six-month high. Prices (USO) (UCO) could have also fallen due to profit-booking.
December E-Mini S&P 500 (SPY) futures contracts fell 0.15% to 2,563.5 in electronic exchange at 2:00 AM EST on October 25, 2017.
API’s gasoline and distillate inventories
The API released its crude oil inventory report on October 24, 2017. It estimates that US gasoline and distillate inventories fell by 5.75 MMbbls (million barrels) and 4.95 MMbbls on October 13–20, 2017.
The market expected that US gasoline and distillate inventories would have fallen by 0.01 MMbbls and 0.86 MMbbls during the same period. Any fall in gasoline and distillate inventories is bullish for gasoline (UGA) and diesel prices. Higher gasoline and diesel prices are bullish for crude oil (USO) (UCO) (SCO) prices. Higher oil prices benefit oil producers (IEZ) (IYE) like Sanchez Energy (SN), Newfield Exploration (NFX), and Energen (EGN).
EIA’s US crude oil inventories
The EIA (U.S. Energy Information Administration) will release its weekly crude oil inventory report at 10:30 AM EST on October 25, 2017. If the EIA reports a larger-than-expected fall in US crude oil inventories, it would benefit oil (OIL) (DTO) prices. For more on US crude oil inventories, read the previous part in this series.
If the EIA reports a larger-than-expected fall in US gasoline and distillate inventories, it would support gasoline and diesel prices. As a result, it would help crude oil prices.
In the next part, we’ll discuss how gasoline demand impacts crude oil prices.