US crude oil futures
Prices advanced as rebels in Nigeria threatened to attack oil and gas infrastructure in the next few days. Any crude oil supply outage in Nigeria is bullish for oil (DBO) prices. The API’s (American Petroleum Institute) bullish crude oil inventory report also supported oil prices on January 18, 2018. Crude oil prices are at three-year high, which benefits the Energy Select Sector SPDR ETF (XLE). XLE rose 0.88% to 77.1 on January 17, 2018.
Meanwhile, March E-Mini S&P 500 (SPY) futures contracts fell 0.04% to 2,802.75 at 1:15 AM EST on January 18, 2018.
API’s gasoline inventories
On January 17, 2018, the API published its crude oil inventory report. US gasoline inventories rose by 1.8 MMbbls (million barrels) on January 5–12, 2018, according to the API.
Analysts expected that US gasoline inventories would rise by 3.5 MMbbls during the same period. A larger-than-expected increase in gasoline inventories could pressure gasoline (UGA) and crude oil (DBO) prices.
Lower gasoline prices have a negative impact on US refiners (CRAK) like Delek US Holdings (DK) and Phillips 66 (PSX). Similarly, lower oil (UWT) prices have a negative impact on energy companies (XOP) (PXI) like Recon Technology (RCON), Sanchez Energy (SN), and Gastar Exploration (GST).
API’s distillate inventories
The API estimated that US distillate inventories rose by 0.6 MMbbls on January 5–12, 2018. Previously, analysts estimated that US distillate inventories could have risen by 0.1 MMbbls during the same period. A larger-than-expected increase in distillate inventories could pressure diesel and oil (USO) prices.
Next, we’ll discuss how OECD crude oil inventories impact oil prices.