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US Crude Oil Inventory Data: What to Expect

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US crude oil inventory data

In the week ending April 20, US crude oil inventories rose by ~2.17 MMbbls (million barrels) to ~429.7 MMbbls. However, the market expected a fall of 1.6 MMbbls in the EIA’s data on April 25. On the same day, US crude oil June futures rose 0.5%. Concerns about the US imposing sanctions on Iran could have helped oil ignore the bearish inventory data.

For the week ending April 20, US crude oil inventories were 3.5% less than their five-year average—10 basis points less than a week ago. The difference is called the “inventories spread.” Oil prices and the inventories spread usually move inversely, as you can see in the above graph. So, the slight expansion in the inventories spread into the negative zone could have supported oil prices.

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Inventories spread and oil prices

Since the EIA data were released on April 25, US crude oil prices have risen 0.8% to date.

On April 25–30, Oasis Petroleum (OAS), Carrizo Oil & Gas (CRZO), and Denbury Resources (DNR) rose 3.7%, 3.1%, and 3.1%, respectively—the largest gainers on our list of oil-weighted stocks.

Since April 25, the iShares Global Energy ETF (IXC) and the iShares US Energy ETF (IYE) have risen 0.4% and 0.3% to date. These ETFs hold energy stocks.

What rise should the market expect?

Any rise less than ~1.13 MMbbls in US crude oil inventories for the week ending April 27 would help the inventories spread expand more into the negative zone. Obviously, a fall in US crude oil inventories like last year would be bullish for oil prices. The EIA is scheduled to announce the US crude oil inventory data on May 2. In the past five years, the average rise in US crude oil inventories for this time of the year is ~1.16 MMbbls.

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