Crude Oil Price Turns Lower on Small Inventory Growth

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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 900,000 barrels last week, maintaining a total U.S. commercial crude inventory of 530.6 million barrels. The commercial crude inventory remains at historically high levels for this time of year, according to the EIA.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 5.2 million barrels in the week ending June 17. API also reported gasoline supplies fell by 1.5 million barrels and distillate stockpiles fell by 1.7 million barrels. For the same period, analysts had estimated a decrease of around 1.6 million barrels in crude inventories along with a decline of 400,000 barrels in gasoline supplies and a 300,000-barrel increase in distillates.

Total gasoline inventories increased by 600,000 barrels last week, according to the EIA, and remain well above the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged over 9.7 million barrels a day for the past four weeks, up by 3.9% compared with the same period a year ago.

Like the rest of the world, oil markets have been paying close attention to Thursday’s vote in Britain on whether the country will remain in the European Union. As sentiment shifts, crude prices rise when traders believe that Britain will stay put and fall when sentiment for leaving (Brexit) rises.

Crude prices also feel the effect of a rising dollar versus the British pound because stronger dollars typically put downward pressure on dollar-priced crude. Crude prices have been on an upward trajectory since late last week after falling from year-to-date highs earlier in June. In this particular case, however, strong sentiment that Britain will remain in the EU is prevailing over the dollar.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for August delivery traded up about 0.7% at around $50.20 a barrel and dropped back to around $49.75 shortly after the report’s release. WTI crude settled at $49.85 on Tuesday. The 52-week range on July futures is $32.22 to $61.79.

Distillate inventories increased by 200,000 barrels last week and also remain well above the upper limit of the average range for this time of year. Distillate product supplied averaged over 3.8 million barrels a day over the past four weeks, down by 2.6% when compared with the same period last year. Distillate production averaged 3.8 million barrels a day last week, down about 1.6% compared with the prior week.

For the past week, crude imports averaged over 8.4 million barrels a day, up by about 817,000 barrels a day compared with the previous week. Refineries were running at 91.3% of capacity, with daily input averaging 16.5 million barrels, about 188,000 barrels a day more than the previous week’s average.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.321, down from $2.366 a week ago and up about four cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.792 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 report.

Exxon Mobil Corp. (NYSE: XOM) traded up 0.1%, at $91.63 in a 52-week range of $66.55 to $91.93. Over the past 12 months, Exxon stock has traded up about 7.6% and is down about 11.3% since August 2014, as of Tuesday’s close.

Chevron Corp. (NYSE: CVX) traded down about 0.2%, at $102.99 in a 52-week range of $69.58 to $104.26. As of Tuesday’s close, Chevron shares have added about 1.4% over the past 12 months and trade down about 19.6% since August 2014.

The United States Oil ETF (NYSEMKT: USO) traded down about 0.2%, at $11.86 in a 52-week range of $7.67 to $20.62.

The Market Vectors Oil Services ETF (NYSEMKT: OIH) traded up about 0.5% at $29.83, in a 52-week range of $20.46 to $36.01.