Crude Oil Price Holds as Inventories Drop, Crude Oil Exports Soar

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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 1.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 471 million barrels. The commercial crude inventory remains 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 761,000 barrels in the week ending September 22. API also reported gasoline supplies fell by 1.5 million barrels and distillate inventories fell by 4.5 barrels. For the same period, analysts had consensus estimates for an increase of 2.3 million barrels in crude inventories, a decrease of 962,000 barrels in gasoline inventories and a drop of 2.472 million barrels in distillate stockpiles.

Total gasoline inventories rose by 1.1 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 9.9 million barrels of gasoline a day last week, up about 400,000 barrels compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged over 9.4 million barrels a day for the past four weeks, down by about 100,000 barrels a day compared with the prior week.

The analysts at RBN Energy reported this morning on second-quarter profits for 43 oil and gas exploration and production (E&P) firms. In the first quarter of the year, the industry posted profits of $9.1 billion, or $9.12 per barrel of oil equivalent. In the second quarter profit fell by 80% to $1.7 billion ($1.71 a barrel), including a $6.3 billion impairment charge taken by ConocoPhillips. Excluding that charge, second-quarter profit totaled $8.0 billion ($8.02 a barrel).

E&P firms weighted more heavily for oil production posted pretax income of $1.88 billion in the second quarter, while gas-weighted firms posted pretax income of $1.36 billion. Diversified firms posted a loss of $1.53 billion for the quarter, including the Conoco impairment. Excluding Conoco, profit totaled $1.2 billion, down from $1.3 billion in the first quarter.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for November delivery traded up about 0.25% at around $52.04 a barrel, and it traded at $51.94 shortly after the report’s release. Prices bounced back above $52 a barrel within a few minutes. WTI settled at $51.88 on Tuesday and opened at $52.09 Wednesday morning. The 52-week range on November futures is $42.84 to $58.37.

Distillate inventories decreased by 800,000 barrels last week and remain in the lower half 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 by 13.9% compared with the same period last year. Distillate production averaged over 4.6 million barrels a day last week, up about 100,000 barrels a day compared to the prior week’s production.

For the past week, crude imports averaged over 7.4 million barrels a day, up by 59,000 barrels a day compared with the previous week. Refineries were running at 88.6% of capacity, with daily input averaging 16.2 million barrels a day, about a million barrels a day more than the previous week’s average.

Crude oil exports rose to 1.49 million barrels a day last week, up by 564,000 barrels over the prior week and 984,000 barrels more than at the same time last year. The cumulative daily average export total last week rose to 783,000 barrels a day, up from 483,000 barrels a day in the same week a year ago, an increase of 62.2%.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.571, down nearly three cents from $2.607 a week ago and up about 20 cents per gallon compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.207 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 0.1%, at $80.94 in a 52-week range of $76.05 to $93.22. Over the past 12 months, Exxon stock has traded down about 6.4%.

Chevron Corp. (NYSE: CVX) traded down about 0.4%, at $117.02 in a 52-week range of $98.75 to $119.00. As of last night’s close, Chevron shares are trading up about 16% over the past 12 months.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.1%, at $10.50 in a 52-week range of $8.65 to $12.00.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded down about 1%, at $25.59 in a 52-week range of $21.70 to $36.35.