Crude Oil Price Improves on Small Rise to Stockpiles, but Gasoline, Exports Weigh

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning showing that U.S. commercial crude inventories increased by 1.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 422.1 million barrels. The commercial crude inventory has now slipped into the lower half of the average range for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories rose by about 3.95 million barrels in the week ending February 9. Gasoline inventories rose by 4.63 million barrels, and distillate stockpiles increased by 1.1 million barrels. For the same period, analysts polled had consensus estimates for an increase of 2.83 million barrels in crude inventories, a rise of about 1.23 million barrels in gasoline and a decrease of 1.13 million barrels in distillate stockpiles.

Total gasoline inventories increased by 3.6 million barrels last week, according to the EIA, and have moved into the upper half of the five-year average range. U.S. refineries produced about 9.6 million barrels of gasoline a day last week, down by about 500,000 barrels a day compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9 million barrels a day for the past four weeks, up about 6.5% compared with the same period a year ago.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for March delivery traded down about 0.9% at around $58.65 a barrel, and it rose to around $59.25 (up 0.2%) shortly after the report’s release. WTI settled at $59.19 on Tuesday and opened at $58.95 Wednesday morning. The 52-week range on March futures was $43.91 to $66.66.

Over the past two weeks, speculators have lopped off a total of 63 million barrels of long futures and options on the six most heavily traded petroleum contracts. The drop in long positions coincides with a sharp drop in crude oil prices over roughly the same period.

The drop in crude prices is variously attributed to the drop in equity prices, a strengthening dollar and an unexpectedly large increase in U.S. shale production.

Week over week, U.S. crude oil exports rose by 35,000 barrels a day last week, and U.S. production increased by a 20,000 barrels a day to 10.27 million barrels a day. Exports averaged 1.32 million barrels a day last week and have a cumulative daily average for the year of 1.37 million barrels a day, a 97% increase over the year-ago export total.

Distillate inventories decreased by 500,000 barrels last week and remained in the middle of the average range for this time of year. Distillate product supplied averaged over 4 million barrels a day for the past four weeks, up by 6.3% compared with the same period last year. Distillate production averaged over 4.8 million barrels a day last week, down about 300,000 barrels a day compared to the prior week’s production.

For the past week, crude imports averaged 7.9 million barrels a day, down by just 4,000 barrels a day compared with the previous week. Refineries were running at 89.8% of capacity, with daily input averaging about 16.2 million barrels a day, about 634,000 barrels a day less than the previous week’s average. Exports of refined products rose by 517,000 barrels a day last week to 4.95 million barrels a day.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.56, down 3.5 cents from $2.605 a week ago and up more than three cents per gallon compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.284 on average in the United States.

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 down 0.7%, at $75.76 in a 52-week range of $73.90 to $89.30. Over the past 12 months, Exxon stock has traded down about 8.7%.

Chevron Corp. (NYSE: CVX) traded down about 0.3%, at $112.95 in a 52-week range of $102.55 to $133.88. As of last night’s close, Chevron shares are trading up about 14.4% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded up about 0.7%, at $11.94 in a 52-week range of $8.65 to $13.30.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded up about 0.3%, at $24.05 in a 52-week range of $21.70 to $33.62.