Crude Oil Price Struggles to Hold Above $50 After Inventory Report

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 2.5 million barrels last week, maintaining a total U.S. commercial crude inventory of 463.9 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 rose by 2.3 million barrels in the week ending July 17. For the same period, analysts had estimated a decrease of 1.6 million barrels in crude inventories.

Total gasoline inventories decreased by 1.7 million 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 over 9.6 million barrels a day for the past four weeks, up by 6.9% compared with the same period a year ago.

Uncertainty in the crude markets about the potential impact of the lifting of sanctions against Iran have been compounded by increased production from OPEC combined with a stronger dollar, A sizable gain in short futures positions held by hedge funds have conspired to keep crude prices down. In short, supply continues to exceed demand, and with the U.S. summer driving season more than halfway over, the outlook for crude producers is not improving.

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Before the EIA report, West Texas Intermediate (WTI) crude for August delivery traded down nearly 1.8% at around $49.97 a barrel. The WTI price remained unchanged shortly after the report was released. The 52-week range on WTI futures is $49.69 to $94.88.

Distillate inventories increased by 200,000 barrels last week and remain in the middle of the average range for this time of year. Distillate product supplied averaged 3.8 million barrels a day over the past four weeks, down by 1.5% when compared with the same period last year. Distillate production averaged 5.1 million barrels a day last week, again about flat compared with the prior week’s production.

For the past week, crude imports averaged over 7.9 million barrels a day, up by about 587,000 barrels a day compared with the previous week. Refineries were running at 95.5% of capacity, with daily input of about 16.9 million barrels, about 45,000 barrels a day above the previous week’s average.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.746, down from $2.776 a week ago and from $2.792 a month ago. Last year at this time, a gallon of regular cost $3.565 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 this latest EIA report.

Exxon Mobil Corp. (NYSE: XOM) traded up about 0.4%, at $83.32 in a 52-week range of $81.49 to $104.76. Year to date, Exxon stock traded down about 11.4% and is down about 15.4% since early November, as of Tuesday’s close.

Chevron Corp. (NYSE: CVX) traded up about 0.1%, at $94.00 in a 52-week range of $93.26 to $135.10. As of the most recent close, Chevron shares have also dropped about 16.2% year to date and trade down about 21.6% since early November.

The United States Oil ETF (NYSEMKT: USO) traded down about 2.3%, at $16.52 in a 52-week range of $15.61 to $38.30.

The Market Vectors Oil Services ETF (NYSEMKT: OIH) traded down about 1.2%, at $31.72 in a 52-week range of $31.46 to $57.99. The low was posted Wednesday morning.