Crude Oil, Gasoline Inventories Down Sharply as Holiday Weekend Nears

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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 3.2 million barrels last week, maintaining a total U.S. commercial crude inventory to 384.9 million barrels, and have moved above the upper limit of the five-year range for this time of the year.

Total gasoline inventories decreased by 1.2 million barrels last week and are now in the middle of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged 9 million barrels a day over the past four weeks, up about 0.5% over the same period a year ago.

Distillate inventories rose by 1 million barrels last week and are near the lower limit of the average range. Distillate product supplied averaged more than 3.8 million barrels a day over the past four weeks, down by 8% when compared with the same period last year. Distillate production averaged 5 million barrels a day last week, about 300,000 barrels above the prior week’s production.

Tuesday evening, the American Petroleum Institute (API) reported that crude inventories fell by 875,000 barrels in the week ending June 27, together with a decline of 410,000 barrels in gasoline supplies and an increase of 4.4 million barrels in distillate supplies. For the same period, analysts estimated a decrease of 2 million barrels in crude inventories, a decline of 750,000 barrels in gasoline inventories and a rise of 250,000 barrels in distillate inventories.

Before the EIA report, West Texas Intermediate (WTI) crude was trading down at around $104.65 a barrel, about 0.7% below Tuesday’s closing price of $105.34. The WTI price rose to around $105.04 a barrel shortly after the report was released.

For the past week, crude imports averaged more than 7.3 million barrels a day, down by 76,000 barrels a day over the previous week. Refineries were running at 91.45% of capacity, with daily input of more than 16.2 million barrels a day, up 546,000 barrels a day compared with the previous week’s average.

The situation in Iraq has lost its position as a leading driver of higher crude prices. The issue now will be the movement toward exporting near-crude, or shall we call it lightly-refined crude. Rising inventories of gasoline and diesel fuel should also help moderate prices.

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According to AAA, the current national average pump price per gallon of regular gasoline is $3.67, down from $3.681 a week ago and flat with a price of $3.669 a month ago. Last year a gallon of regular cost $3.478 on average in the United States.

Here is a look at how share prices at three U.S. producers reacted to the most recent report.

Exxon Mobil Corp. (NYSE: XOM) traded down fractionally to $101.30, in a 52-week range of $84.79 to $104.61.

Chevron Corp. (NYSE: CVX) also traded down fractionally, at $130.47 in a 52-week range of $109.27 to $133.57.

Continental Resources Inc. (NYSE: CLR) traded down about 0.3%, at $157.04 in a 52-week range of $83.71 to $159.24. Continental is the largest producer in the Bakken Shale play.

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