Crude Oil Price Cuts Loss After Inventory Report

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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 1.6 million barrels last week, maintaining a total U.S. commercial crude inventory of 429.9 million barrels. The commercial crude inventory remains in 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 5.3 million barrels in the week ending March 23. Gasoline inventories fell by 5.6 million barrels, and distillate stockpiles decreased by 2.2 million barrels. For the same period, analysts expected inventories to remain about flat.

Total gasoline inventories decreased by 3.5 million barrels last week, according to the EIA, and have slipped into the upper half of the five-year average range. U.S. refineries produced over 10.3 million barrels of gasoline a day last week, up by about 400,000 compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged about 9.4 million barrels a day for the past four weeks, up about 0.5% compared with the year-ago period.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for May delivery traded down about 1.2% at around $64.44 a barrel, and it rose to around $64.60 (down about 1%) shortly afterward. WTI settled at $65.25 on Tuesday and opened at $64.70 Wednesday morning. The 52-week range on May futures is $44.34 to $66.55.

WTI posted a one-month high over $65 a barrel last week, but the price has come down in the first two trading days of this week and has dipped more this morning. Added production from U.S. shale plays has raised traders’ concerns for oversupply in the market.

On Tuesday Saudi Crown Prince Mohammed bin Sultan said that Saudi Arabia and Russia are considering a 10-year to 20-year agreement to extend the current reduced production levels. The agreement between OPEC and 11 other producing nations, including Russia, is set to expire at the end of this year.

U.S. crude oil exports rose by 5,000 barrels a day last week, and U.S. production rose by 26,000 barrels a day to 10.43 million barrels. Exports averaged 1.58 million barrels a day last week and have a cumulative daily average for the year of 1.49 million barrels a day, a 92% increase over the year-ago export total.

Distillate inventories decreased by 2.1 million barrels last week and remain in the lower half of the average range for this time of year. Distillate product supplied averaged over 4 million barrels a day for the past four weeks, down by 4.1% compared with the same period last year. Distillate production averaged about 4.8 million barrels a day last week, up by about 300,000 compared to the prior week’s production.

For the past week, crude imports averaged over 8.1 million barrels a day, 1.1 million higher compared with the previous week. Refineries were running at 92.3% of capacity, with daily input averaging about 16.8 million barrels a day, about 18,000 more than the previous week’s average. Exports of refined products fell by 80,000 barrels a day last week to 4.91 million.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.635, up about seven cents from $2.566 a week ago and more than 10 cents per gallon compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.290 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 about 0.1%, at $73.64 in a 52-week range of $72.673 to $89.30. Over the past 12 months, Exxon stock has traded down about 10.2%.

Chevron Corp. (NYSE: CVX) traded down about 0.6%, at $113.97 in a 52-week range of $102.55 to $133.88. As of last night’s close, Chevron shares are trading up about 5.9% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded down about 0.6%, at $13.00 in a 52-week range of $8.65 to $13.30.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 1.4%, at $23.49 in a 52-week range of $21.70 to $31.54.