Energy Economy

Crude Oil Inventories Deliver More Hope for Lower Gasoline Prices

Paul Ausick

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, a day later than usual due to the Veterans Day holiday. U.S. commercial crude inventories increased by 2.6 million barrels last week, maintaining a total U.S. commercial crude inventory of 388.1 million barrels. They remain above the upper limit of the five-year range for this time of the year.

Total gasoline inventories also decreased by 800,000 barrels last week and are near the top of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged about 9 million barrels a day over the past four weeks, down about 100,000 barrels a day from the prior week average and up 4.7% compared with the same week a year ago.

Distillate inventories fell by 5 million barrels last week and have fallen near the lower limit of the average range. Distillate product supplied averaged 3.9 million barrels a day over the past four weeks, up by 6.9% when compared with the same period of last year. Distillate production totaled 4.9 million barrels a day last week, about flat compared with the prior week.

Tuesday evening, the American Petroleum Institute reported that crude inventories rose by 600,000 barrels in the week ending November 8, together with a decline of 1.7 million barrels in gasoline supplies and an increase of 600,000 barrels in distillate supplies. For the same period, Platts estimated a rise of 1.8 million barrels in crude inventories, a decrease of 1.2 million barrels in gasoline inventories and a decrease of 1.2 million barrels in distillate inventories.

Crude prices closed at $94.19 on Wednesday and were trading lower before the EIA report at around $93.10 a barrel. The West Texas Intermediate (WTI) price slipped further to around $92.50 shortly after the report was released.

For the past week, crude imports averaged about 7.8 million barrels a day, up about 620,000 barrels a day from the previous week. Refineries were running at 88.7% of capacity, with daily input of 15.4 million barrels a day, about 343,000 barrels a day higher than the previous week’s total.

Gasoline pump prices have slipped again in the past week, and a continuing drop in crude prices should keep those prices on the decline. According to the AAA Fuel Gauge report, a gallon of regular gasoline costs about $3.19, compared with about $3.22 a week ago. Last month the price was $3.35 a gallon, and one year ago the price of a gallon of regular gasoline was $3.44.

The United States Oil ETF (NYSEMKT: USO) was down about 1.2%, at $33.47 in a 52-week range of $30.79 to $39.54.

The United States Gasoline ETF (NYSEMKT: UGA) was up about 1.8%, at $57.35, in a 52-week range of $53.35 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) was up 1.1%, at $42.61 in a 52-week range of $36.88 to $45.05.