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Surprise Build in US Crude Oil Inventories Helps Crude Oil Bears

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US crude oil inventories 

The EIA (U.S. Energy Information Administration) released its Weekly Petroleum Status Report on October 25, 2017. It reported that crude oil inventories rose by 856,000 barrels to 457.3 MMbbls (million barrels) on October 13–20, 2017. The inventories are near a three-week high. They have fallen by 10.8 MMbbls or 2.3% year-over-year.

A Reuters survey predicted that the US crude oil inventories would have fallen by 2,600,000 barrels on October 13–20, 2017. US crude oil (USO) (UCO) (DTO) prices fell on October 25, 2017, due to the surprise build in US crude oil inventories.

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West Texas Intermediate (or WTI) crude oil (DWT) (UCO) prices are near a six-month high. They have risen 5% in the last three months due to several bullish drivers. The volatility in oil prices impacts energy producers (FENY) (FXN) (VDE) like EOG Resources (EOG), Whiting Petroleum (WLL), Anadarko Petroleum (APC), and Marathon Oil (MRO).

US refinery crude oil demand, imports, and exports 

The US refinery crude oil demand rose by 586,000 bpd (barrels per day) or 3.7% to 16, 025,000 bpd on October 13–20, 2017. The refinery demand rose by 473,000 bpd or 3% from the same period in 2016.

US crude oil imports rose by 640,000 bpd or 8.5% to 8,123,000 bpd on October 13–20, 2017. The imports rose by 1,107,000 bpd or 15.7% from the same period in 2016.

US crude oil exports rose by 126,000 bpd to 1,924,000 bpd on October 13–20, 2017. The exports have more than tripled from the same period in 2016.

Impact of US crude oil inventories

Nationwide crude oil inventories are 16.7% higher than the five-year average for the week ending October 20, 2017. High US oil inventories could weigh on oil (DBO) (SCO) prices.

In the next part, we’ll discuss how US crude oil production impacts oil prices.

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