Crude Oil Bounced Once, Then Sank Following Inventory Report

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning, showing that U.S. commercial crude inventories decreased by 7.6 barrels last week, maintaining a total U.S. commercial crude inventory of 495.4 million barrels. The commercial crude inventory remained in the upper half of the average range for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 8.13 million barrels in the week ending July 7. API also reported gasoline supplies decreased by 800,000 barrels and distillate inventories increased by 2.1 million barrels. For the same period, an S&P Global Platts survey of analysts had consensus estimates for a decrease of 2.6 million barrels in crude inventories, an increase of 400,000 barrels in gasoline inventories, and a rise of 1.2 million barrels in distillate stockpiles.

Total gasoline inventories decreased by 1.6 million barrels last week, according to the EIA, and remain in the upper half of the five-year average range. U.S. refineries produced about 10.5 million barrels of gasoline a day last week, up by about 100,000 barrels a day compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged over 9.7 million barrels a day for the past four weeks, down by 0.3% compared with the same period a year ago.

Domestic crude oil production rose by 59,000 barrels week over week and is now 912,000 barrels a day higher than at the same time last year. Crude oil imports are down by 276,000 barrels a day year over year. Crude oil exports totaled 768,000 barrels a day last week, and daily average exports are up more than 76% year over year to 760,000 barrels a day. Gasoline production was down 4.4 million barrels a day year over year and distillate (diesel fuel and heating oil) production rose nearly 600,000 barrels a day compared to the same time last year. Refinery input rose more than 428,000 barrels a day year over year.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for August delivery traded up about 2.5% at around $46.15 a barrel, and it slipped to around $46.10 (up 2.4%) shortly after the report’s release. WTI settled at $45.04 on Tuesday and opened at $45.74 Wednesday morning. The 52-week range on August futures is $42.06 to $58.30. Within half an hour, oil had given back all but about 15 cents of its gain.

Distillate inventories increased by 3.1 million barrels last week and remain above the upper limit of the average range for this time of year. Distillate product supplied averaged 4.1 million barrels a day over the past four weeks, up by 8.8% compared with the same period last year. Distillate production averaged over 5.3 million barrels a day last week, up about 200,000 barrels a day compared with the prior week’s production.

For the past week, crude imports averaged over 7.6 million barrels a day, down by about 132,000 barrels a day compared with the previous week. Refineries were running at 94.5% of capacity, with daily input averaging over 17.2 million barrels a day, about 103,000 barrels a day more than the previous week’s average. Analysts were looking for refinery usage of 94.3% for the week.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.258, up more than $0.025 from $2.231 a week ago and down nearly eight cents per gallon compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.225 on average in the United States.

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

Exxon Mobil Corp. (NYSE: XOM) traded up about 0.3%, at $80.83 in a 52-week range of $79.26 to $95.55. Over the past 12 months, Exxon stock has traded down about 15%.

Chevron Corp. (NYSE: CVX) traded up nearly 0.5%, at $103.58 in a 52-week range of $97.53 to $119.00. As of last night’s close, Chevron shares are down about 3.4% over the past 12 months.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.4%, at $9.31 in a 52-week range of $8.65 to $12.00.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded down about 0.7%, at $24.46 in a 52-week range of $23.63 to $36.35.