Crude oil futures
US crude oil futures contracts for March delivery rose 1.2% from the previous settlement and were trading at $61.37 per barrel at 1:10 AM EST on February 15, 2018. Prices rose due to the weak US dollar and positive comments from Saudi Arabia. For more details, read the previous part of this series.
Meanwhile, US crude oil futures contracts rose 2.4% on February 14, 2018. The ProShares Ultra Bloomberg Crude Oil ETF (UCO) rose 5.3% to 23.8 on the same day. UCO tracks crude oil futures.
EIA’s US crude oil inventories
The EIA released its weekly crude oil inventory report on February 14, 2017. The EIA reported that US crude oil inventories increased by 1.8 MMbbls (million barrels) or 0.4% to 422 MMbbls on February 2–9, 2018. However, inventories declined by 96 MMbbls or 18.5% from a year ago.
Analysts estimated that US crude oil inventories could have increased by 2.8 MMbbls on February 2–9, 2018. The less-than-expected rise in inventories could have supported oil prices on February 14, 2018. US crude oil futures contracts rose 2.4% to $60.60 per barrel on the same day.
The Energy Select Sector SPDR ETF (XLE) rose 1.4% to 68.4 on February 14, 2018, while the iShares U.S. Energy ETF (IXC) rose 1.4% to 34.07 on the same day. These ETFs have exposure to oil and gas companies.
Refinery demand, imports, and exports
US crude oil refinery demand decreased ~4% to 16,162,000 bpd (barrels per day) on February 2–9, 2018, according to the EIA. However, demand increased by 704,000 bpd or 4.5% from a year ago.
US crude oil imports decreased by 4,000 bpd to 7,888,000 bpd on February 2–9, 2018, according to the EIA. The imports also decreased by 603,000 bpd or ~7.1% from a year ago.
US crude oil exports increased by 35,000 bpd to 1,322,000 bpd on February 2–9, 2018. The exports also increased by 296,000 bpd or 29% from a year ago. Changes in oil supply and demand impact inventories.
WTI oil prices increased 12.4% in 2017, while US crude oil inventories dropped ~12% during the same period. Inventories also declined ~22% from their peak, which is bullish for oil prices.
US oil inventories are 3% above their five-year average, which is bearish for oil prices. If the difference declines, it’s a bullish sign for oil prices.
Next, we’ll discuss US crude oil production.