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Analyzing US Crude Oil and Gasoline Inventories

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Crude oil futures  

US crude oil (USO) (UCO) futures contracts for December delivery fell 1.1% to $55.07 per barrel in electronic exchange at 1:15 AM EST on November 15, 2017. Prices fell due to API’s (American Petroleum Institute) bearish crude oil inventory report. The report was released yesterday. Lower oil prices pressure energy producers’ (RYE) (XES) profitability like Occidental Petroleum (OXY), PetroChina (PTR), Stone Energy (SGY), and EOG Resources (EOG).

December E-Mini S&P 500 (SPY) (SPX-INDEX) futures contracts fell 0.27% to 2,570.75 in electronic trading during the same period on November 14, 2017.

API’s crude oil inventory estimates  

The API reported that US crude oil inventories rose by 6,513,000 barrels on November 3–10, 2017. A Wall Street Journal survey estimated that US crude oil inventories would have fallen by ~1,400,000 barrels during the same period. The surprise build in US crude oil inventories weighed on US oil (DBO) (USL) prices on November 14, 2017. US crude oil inventories are ~15% above their five-year average, which is also bearish for oil (DTO) (OIL) prices.

API’s gasoline and distillate inventories 

US gasoline inventories rose by 2,399,000 barrels on November 3–10, 2017. However, distillate inventories fell by 2,527,000 barrels during the same week.

The market expects that US gasoline and distillate inventories could have fallen by 1,100,000 barrels and 500,000 barrels during the same week.

EIA’s US crude oil inventories 

The EIA (U.S. Energy Information Administration) will publish its Weekly Petroleum Status Report at 10:30 AM EST on November 15, 2017. If the EIA’s report follows the API’s report, it would pressure crude oil and gasoline prices. However, a larger-than-expected fall in US crude oil and gasoline inventories could support oil (UWT) (DWT) and gasoline (UGA) prices.

In the next part, we’ll discuss how gasoline demand influences crude oil prices.

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