Yahoo Finance Crude Oil Prices Rose 6% on the EIA’s Inventory Report
Crude Oil Prices Rose 25% in the Last 3 Weeks despite the Oil Glut
EIA’s crude oil inventory report
On September 16, 2015, the EIA (U.S. Energy Information Administration) published the weekly US commercial crude oil inventory report. The US agency projected that crude oil stocks fell by 2.1MMbbls (million barrels) to 455.9 MMbbls for the week ending September 11, 2015. In contrast, the crude oil stockpile rose by 2.6 MMbbls to 458 MMbbls for the week ending September 4, 2015.
Inventory surveys and impact
Bloomberg surveys estimates that the US crude oil stockpile could rise by 1.75 MMbbls for the week ending September 11, 2015. The larger-than-expected inventory fall led to a massive rise in crude oil prices. Prices rose almost 6% at the end of trade on September 15, 2015. The falling inventory implies that the crude oil supply is falling or demand is rising. The crude oil inventory fell for the second time in the last four weeks. The fall in US crude oil imports also supported the fall in the crude oil inventory.
US crude oil imports fell by 270,000 bpd (barrels per day) to 7.2 MMbpd (million barrels per day) for the week ending September 11, 2015. The monthly crude oil imports averaged around 7.4 MMbpd during the same period. This is 4.30% below the same period in 2014.
The inputs to crude oil refineries rose by 403,000 bpd to 16.5 MMbpd for the week ending September 11, 2015—compared with the previous week. Crude oil refineries operated at 93.10% of their operable capacity over the same period.
Refined products inventory
The EIA also added that distillates stocks fell by 3 MMbbls for the week ending September 11, 2015. Likewise, the gasoline stockpile also fell by 2.84 MMbbls for the same period. The fall in refined products’ stocks implies that retail demand is rising. It could benefit crude oil prices.
The recent surge in crude oil prices benefits US upstream players like Pioneer Natural Resources (PXD), Apache (APA), and Hess (HES). Combined, they account for 7.60% of the Energy Select Sector SPDR ETF (XLE). These stocks’ crude oil production mix is more than 49% of their total production. Oil and gas ETFs like XLE and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) are also impacted by the roller coaster ride in crude oil prices.
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