API’s crude oil inventories
On June 19, the API (American Petroleum Institute) released its weekly crude oil inventory report. The API reported that US crude oil inventories fell by 3 MMbbls (million barrels) on June 8–15. A Bloomberg survey estimates that US oil inventories could have declined by 2.5 MMbbls during the same period. The survey also estimates that Cushing crude oil inventories could have declined by 0.5 MMbbls on June 8–15. The EIA is scheduled to release its inventory data on June 20.
Drivers of crude oil futures
August WTI crude oil prices fell on June 19 due to the trade tariff conflict between the US and China and the strong US Dollar Index. The expectations of a rise in US crude oil production could also pressure oil prices. A large increase in OPEC and Russia’s output by easing the ongoing supply cuts could also pressure oil prices. OPEC’s meeting is scheduled for June 22. However, the expectation of a decline in US crude oil inventories and supply outages in Libya could benefit oil prices.
WTI crude oil prices fell ~1.2% on June 19. The Energy Select Sector SPDR ETF (XLE) fell ~0.23% on the same day. The companies in XLE produce crude oil and natural gas, refine crude oil into fuels, and provide energy-related services and equipment.
Pioneer Natural Resources (PXD), Schlumberger (SLB), Occidental Petroleum (OXY), and Halliburton (HAL) fell ~2.4%, 2%, ~1.4%, and ~1.1%, respectively, on June 19. These stocks were the biggest percentage losses on the same day. These stocks account for ~16.5% of XLE’s holdings.
EIA’s inventory data
A larger-than-expected decline in US oil inventories reported by the EIA on June 20 could help oil prices. However, an unexpected increase in inventories could weigh on oil prices.
Next, we’ll discuss gasoline and distillate inventories.