Crude Oil Price Dips on Surprise Inventory Build

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 2.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 485.4 million barrels. The commercial crude inventory is now at the upper limit of the average range for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 4.1 million barrels in the week ending December 16. API also reported gasoline supplies decreased by 2 million barrels and distillate inventories fell by 1.5 million barrels. For the same period, analysts had estimated a decrease of 2.3 million barrels in crude inventories.

Total gasoline inventories decreased by 1.3 million barrels last week, according to the EIA, and are now well above the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged 9 million barrels a day for the past four weeks, down 3% compared with the same period a year ago.

The SPDR Energy Select Sector ETF (NYSEMKT: XLE) has added more than 25% to its share price so far in 2016. That’s nearly two points better than the Dow Jones Industrial Average and more than five points better than the S&P 500.

More than 40% of the exchange traded fund’s gains have been added since the November election, on the backs of the two Dow components representing more than 30% of the fund’s current assets of $16.42 billion. As crude prices continue to march higher, apparently on their way to a floor of around $55 a barrel, the fund may still have some legs.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for February delivery traded up about 0.1% at around $53.40 a barrel and slipped below $53.00 after the report’s release. WTI crude settled at $53.30 on Tuesday. The 52-week range on February futures is $35.10 to $55.44.

Distillate inventories decreased by 2.4 million barrels last week and remain above the upper limit of the average range for this time of year. Distillate product supplied averaged over 4 million barrels a day over the past four weeks, up 11.7% compared with the same period last year. Distillate production averaged over 5.1 million barrels a day last week, up about 100,000 barrels compared with the prior week’s production.

For the past week, crude imports averaged about 8.5 million barrels a day, up by more than 1.1 million barrels a day compared with the previous week. Refineries were running at 91.5% of capacity, with daily input averaging 16.7 million barrels, about 184,000 barrels a day more than the previous week’s average.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.253, up from $2.220 a week ago and up nearly 12 cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $1.998 on average in the United States.

Here is a look at how share prices for two blue-chip stocks and two ETFs reacted to this latest report.

Exxon Mobil Corp. (NYSE: XOM) traded up less than 0.1%, at $90.47 in a 52-week range of $71.55 to $95.55. Over the past 12 months, Exxon stock has traded up about 17% and is down about 12% since August 2014, as of Tuesday’s close.

Chevron Corp. (NYSE: CVX) traded up about 0.4%, at $118.41 in a 52-week range of $75.33 to $118.99. As of last night’s close, Chevron shares have added about 31% over the past 12 months and also trade down about 12% since August 2014.

The United States Oil ETF (NYSEMKT: USO) traded down about 0.5%, at $11.56 in a 52-week range of $7.67 to $12.45.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded up less than 0.1% to $33.73, in a 52-week range of $20.46 to $36.35.