Crude Oil Price Slips on Gasoline Surplus, Lower Demand From Refiners

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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 2.7 million barrels last week, maintaining a total U.S. commercial crude inventory of 467.9 million barrels. The commercial crude inventory remains near levels not seen at this time of year in at least the past 80 years.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 2.9 million barrels and gasoline inventories also declined by 2.9 million barrels in the week ending June 12. For the same period, analysts’ estimates for a decrease fell in a range between 300,000 and 2.4 million barrels in crude inventories.

Total gasoline inventories increased by 500,000 barrels last week, according to the EIA, and remain in the upper half of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged nearly 9.4 million barrels a day for the past four weeks, up by 3.3% compared with the same period a year ago.

The state of North Dakota’s Department of Mineral Resources (DMR) reported last week that crude production in the state fell from 1.23 million barrels a day in December to 1.17 million barrels a day in April, equal with production last September. DMR officials attribute the decline primarily to lower prices (no surprise there) and added that tax changes, stricter rules on flaring and new regulations for conditioning the crude to eliminate the most volatile components from the oil before it is transported contributed to the decline. Over the past 12 months, North Dakota’s rig count has dropped by 56%, from 169 to 76.

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Before the EIA report, West Texas Intermediate (WTI) crude for July delivery traded up about 1.8% at around $61.20 a barrel. The WTI price slipped to around $60.65 (up about 1% for the day) immediately after the report was released. The 52-week range on WTI futures is $47.46 to $97.27.

Distillate inventories increased by 100,000 barrels last week and have moved into the lower half of the average range for this time of year. Distillate product supplied averaged over 3.9 million barrels a day over the past four weeks, down by 2.1% when compared with the same period last year. Distillate production averaged more than 5 million barrels a day last week, down about 100,000 barrels a day compared with the prior week’s production.

For the past week, crude imports averaged about 7.1 million barrels a day, up by 444,000 barrels a day compared with the previous week. Refineries were running at 93.1% of capacity, with daily input of around 16.3 million barrels, about 294,000 barrels a day below the previous week’s average.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.802, up from $2.745 a week ago and from $2.702 a month ago. Last year at this time, a gallon of regular cost $3.664 on average in the United States.

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

Exxon Mobil Corp. (NYSE: XOM) traded up about 0.2% to $84.87, in a 52-week range of $82.68 to $104.76. Year to date, Exxon stock has traded down about 8.2%, and it is down about 12.2% since early November, as of Tuesday’s close.

Chevron Corp. (NYSE: CVX) traded up about 0.2% to $100.23, in a 52-week range of $98.81 to $135.10. As of the most recent close, Chevron shares have also dropped about 10.6% year to date and trade down about 16.4% since early November.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.9% to $20.44, in a 52-week range of $15.61 to $39.44.

The Market Vectors Oil Services ETF (NYSEMKT: OIH) traded up about 2.3% to $37.52, in a 52-week range of $31.51 to $58.01.