Energy Economy

Crude Oil Price Pares Gain Following Inventory Increase

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning, showing that U.S. commercial crude inventories increased by 3.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 428.6 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 1.8 million barrels in the week ending April 6. Gasoline inventories rose by about 2 million barrels and distillate stockpiles decreased by 3.8 million barrels. For the same period, analysts expected crude inventories to slide by half a million barrels and gasoline inventories to drop by 1.4 million barrels. Diesel inventories are seen down about 200,000 barrels.

Total gasoline inventories increased by 500,000 barrels last week, according to the EIA, and now sit at the upper limit of the five-year average range. U.S. refineries produced 10.2 million barrels of gasoline a day last week, up by about 100,000 barrels a day compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9.3 million barrels a day for the past four weeks, down about 0.6% compared with the same period a year ago.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for May delivery traded up about 0.8% at around $66.03 a barrel, and it slipped to around $65.90 (up about 0.7%) shortly after the report’s release. WTI settled at $65.51 on Tuesday and opened at $65.57 Wednesday morning. The 52-week range on May futures is $44.34 to $66.55. At last look, May futures traded up about 2.5% at around $67.20.

In remarks Tuesday, Chinese Premier Xi Jinping appeared to downplay the possibility of an all-out trade war with the United States. That boosted traders’ belief that a slowdown in the global economy is unlikely to occur and with it slower demand for energy. One thing is certain: energy markets will remain volatile for some time to come.

Week over week, U.S. crude oil exports fell by 970,000 barrels a day last week and U.S. production rose by 65,000 barrels a day to 10.53 million barrels. Exports averaged 1.21 million barrels a day last week and have a cumulative daily average for the year of 1.52 million barrels a day, a 102% increase over the year-ago export total.

Distillate inventories decreased by a million barrels last week and remain in the lower half of the average range for this time of year. Distillate product supplied averaged 4.1 million barrels a day for the past four weeks, down by 3.6% compared with the same period last year. Distillate production averaged 5.3 million barrels a day last week, up by about 200,000 barrels a day compared to the prior week’s production.

For the past week, crude imports averaged 8.7 million barrels a day, up by 752,000 barrels a day compared with the previous week. Refineries were running at 93.5% of capacity, with daily input averaging over 17 million barrels a day, about 83,000 barrels a day more than the previous week’s average. Exports of refined products rose by 280,000 barrels a day last week to 5.02 million barrels a day.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.66, up less than a penny from $2.658 a week ago and up nearly 14 cents per gallon compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.397 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 up about 0.1%, at $77.152 in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded down about 7%.

Chevron Corp. (NYSE: CVX) traded down about 0.4%, at $118.40 in a 52-week range of $102.55 to $133.88. As of last night’s close, Chevron shares are trading up about 9% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded up about 1.4% to $13.44, in a 52-week range of $8.65 to $13.44, a high set today.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded up about 2.7% at $25.78 in a 52-week range of $21.70 to $31.42.