US crude oil inventories  

On November 2, 2017, the EIA (U.S. Energy Information Administration) published its weekly crude oil inventory report. It estimates that nationwide crude oil inventories fell by 2,435,000 barrels to 454.9 MMbbls (million barrels) on October 20–27, 2017. The inventories are near a two-year low. The inventories fell 0.5% week-over-week and by 27.6 MMbbls or 5.7% year-over-year.

The market anticipated that US crude oil inventories would have fallen by 1,756,000 barrels on October 20–27, 2017. US crude oil (DBO) (UWT) (DWT) prices rose on November 2, 2017, due to the larger-than-expected fall in US crude oil inventories.

US Crude Oil Inventories Fell 15%: Good News for Oil Bulls

US crude oil (USO) (DBO) prices are at a 28-month high. They have risen 10.3% in the past month due to several bullish drivers discussed in Part 1 of this series. Energy producers (IXC) (IEO) (OIH) like Occidental Petroleum (OXY), Noble Energy (NBL), Stone Energy (SGY), and Cobalt International Energy (CIE) benefit from higher oil prices.

US crude oil inventories by region 

The EIA divides the US into five storage regions. Let’s see the changes in crude oil inventories on October 20–27, 2017.

  • East Coast inventories rose by 1.5 MMbbls to 14.8 MMbbls.
  • Midwest inventories rose by 1.1 MMbbls to 150.8 MMbbls.
  • Gulf Coast inventories fell by 6.8 MMbbls to 217 MMbbls.
  • Rocky Mountain inventories rose by 0.3 MMbbls to 20.6 MMbbls.
  • West Coast inventories rose by 1.4 MMbbls to 51.6 MMbbls. 

Impact of US crude oil inventories 

The nationwide crude oil inventories fell 15% from their peak in March 2017, which is bullish for oil (DTO) (SCO) prices. However, inventories are 15% above their five-year average for the week ending October 27, 2017. It would cap the upside for oil (BNO) (USL) prices.

Next, we’ll discuss how non-OPEC and US crude oil production impacts oil prices.

Latest articles

This morning before the market opened, Tesla (TSLA) was trading on a negative note despite a sharp rise in index futures. As of 9:10 AM ET, Tesla stock had fallen 1.2% in the pre-market session to $234.74 after Goldman Sachs cut the target price on the company by about 21%.

The US-China trade war has already given a scare to Apple’s (AAPL) investors vis-à-vis the possibility of a 25% tariff on Apple goods being imported from its Chinese facilities. As a result, Apple might be considering shifting its plants out of China.

Yesterday, Greenlane Holdings (GNLN) fell a whopping 17.1%. The stock has now fallen 28% this month, and it hit its all-time low yesterday. Greenlane Holdings listed in April and priced its IPO at $17 per share. However, since the stock surged more than 25% after its listing, it has been a sorry story for Greenlane Holdings investors.

Yesterday, Mexico ratified the USMCA. The agreement was negotiated last year and would replace the 25-year-old NAFTA. The United States and Canada are yet to ratify the agreement. Renegotiating NAFTA was among Trump’s prominent campaign promises.

On June 20, Darden Restaurants (DRI) reported its fourth-quarter results. For the quarter ending May 26, the company posted an adjusted EPS of $1.76, which beat analysts’ expectation of $1.73.

20 Jun

GE Aviation Bags $55 Billion in Orders at the Paris Air Show

WRITTEN BY Mayur Sontakke, CFA, FRM

On June 20, GE Aviation published a press release stating that the company and CFM International had bagged $55 billion worth of new orders at the Paris Air Show—and with three more days to go before the closure of the show, there could be further additions to its orderbook.