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US Crude Oil Inventories Fell almost 19% from Their Peak

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Crude oil futures 

February US crude oil futures (USL) (UCO) contracts fell 0.09% to $58.04 per barrel at 1:13 AM EST on December 21, 2017. The United States Oil ETF (USO) rose 0.87% to 11.61 on December 20, 2017. It tracks how crude oil futures performed.

The E-mini S&P 500 (SPY) futures contracts for March delivery rose 0.02% to 2,682 at 1:13 AM on December 21, 2017.

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US crude oil inventories

On December 20, 2017, the EIA published its crude oil inventory report. It estimated that US crude oil inventories fell by 6.4 MMbbls (million barrels) or 1.5% to 436.4 MMbbls on December 8–15, 2017. The inventories also fell by 48 MMbbls or 10% from the same period in 2016.

Earlier, analysts expected that US crude oil inventories would have fallen by 3.7 MMbbls on December 8–15, 2017. A massive draw in US oil inventories supported crude oil (DBO) prices on December 20, 2017.

However, US oil (UWT) prices have fallen 1.5% since the highs on November 24, 2017. Moves in oil prices impact energy producers (XOP) (XLE) like Carrizo Oil & Gas (CRZO), Denbury Resources (DNR), and SM Energy (SM).

Impact  

US crude oil inventories fell for the fifth straight week. They have fallen by 99 MMbbls or ~19% from their peak. So far, inventories have fallen 9.8% in 2017. US oil prices have risen ~10% in 2017. The fall in inventories is bullish for oil prices.

However, US oil inventories are ~41 MMbbls or 10.3% above their five-year average for the week ending December 15, 2017. It’s bearish for oil (USO) prices. If the difference lessens, it’s a bullish sign for oil (UCO) prices.

Next, we’ll discuss US crude oil production.

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