Crude Oil Inventories Drop as Gasoline Inventory Rises

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories decreased by 2.6 million barrels last week, maintaining a total U.S. commercial crude inventory to 386.9 million barrels, and are in the upper half of the five-year range for this time of the year.

Total gasoline inventories increased by 1.7 million barrels last week and remain in the middle of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged 9.1 million barrels a day over the past four weeks, up about 2.8% over the same period a year ago.

Distillate inventories rose by 900,000 barrels last week and remain below the lower limit of the average range. Distillate product supplied averaged 4 million barrels a day over the past four weeks, up by 1.1% when compared with the same period last year. Distillate production averaged 4.9 million barrels a day last week, about 300,000 barrels below the prior week’s production.

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Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 1.5 million barrels in the week ending June 6, together with a decline of 441,000 barrels in gasoline supplies and a drop of 298,000 barrels in distillate supplies. For the same period, analysts estimated a decrease of 1.2 million barrels in crude inventories, a drop of 500,000 barrels in gasoline inventories and a rise of 750,000 barrels in distillate inventories.

Before the EIA report, West Texas Intermediate (WTI) crude was trading up at around $104.42 a barrel, about 0.1% above Tuesday’s closing price of $104.35. The WTI price rose 0.1% to $104.47 a barrel shortly after the report was released.

For the past week, crude imports averaged more than 7.1 million barrels a day, up by 23,000 barrels a day over the previous week. Refineries were running at 87.9% of capacity, with daily input of more than 15.5 million barrels a day, down 510,000 barrels a day compared with the previous week’s average.

Crude prices were rising Wednesday, mostly due to the International Energy Agency’s (IEA) report that supplies need to be increased, combined with OPEC’s statement that the cartel is happy with prices where they are and intends to make no changes in production. Bloomberg reported Wednesday morning that China’s demand is rising as it continues to fill its strategic reserve at the same time that it is clashing with Vietnam over oil resources in the South China Sea and faces delivery risks from other nations for a variety of reasons.

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According to AAA, the current national average pump price per gallon of regular gasoline is $3.644, down from $3.663 a week ago and from $3.654 a month ago. Last year a gallon of regular cost $3.633 on average in the United States.

Here is a look at how share prices at three U.S. producers reacted to this latest report.

Exxon Mobil Corp. (NYSE: XOM) traded up 0.1% to $101.56, in a 52-week range of $84.79 to $103.45.

Chevron Corp. (NYSE: CVX) traded down 0.4%, at $124.90 in a 52-week range of $109.27 to $127.83.

Continental Resources Inc. (NYSE: CLR) traded up about 0.7%, at $146.43 in a 52-week range of $80.44 to $147.24. Continental is the largest producer in the Bakken Shale play.

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