US crude oil futures  

February US crude oil (UCO) (USL) futures contracts fell 0.4% and were trading at $59.7 per barrel at 12:55 AM EST on December 27, 2017. Prices fell due to profit-booking. Meanwhile, March E- Mini S&P 500 (SPY) futures contracts rose 0.07% to 2,688.75 at the same time.

US oil prices were at the highest level since June 2015. Higher oil (DBO) prices favor energy producers’ (XES) (VDE) earnings like Hess (HES), Bill Barrett (BBG), and Bonanza Creek Energy (BCEI).

Will US Crude Oil Inventories Drive Oil Prices to $62 per Barrel?

EIA’s crude oil inventories  

For the week ending December 15, 2017, US crude oil inventories fell for the fifth straight week. So far, nationwide inventories have fallen 9.8% in 2017. During the same period, US oil prices have risen ~10%. Any fall in inventories is bullish for oil (DWT) (UCO) prices.

The EIA is scheduled to release the US crude oil inventory report on December 28, 2017. The market survey estimates that US crude oil inventories would have fallen by ~3.9 MMbbls (million barrels) on December 15–22, 2017.

A larger-than-expected fall in US crude oil inventories could benefit oil prices. It could drive oil prices to $61 per barrel or $62 per barrel. Higher oil (DWT) prices support funds like the Vanguard Energy ETF (VDE) and the iShares U.S. Energy ETF (IYE).

However, traders should be cautious. Any large build in gasoline inventories on December 15–22, 2017, could pressure oil prices. Analysts expect a build of 0.9 MMbbls during this period.

Next, we’ll discuss US crude oil refinery demand and imports.

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