Crude Oil Price Up Slightly on Unexpected Increase in Stockpiles

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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 3.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 408.7 million barrels. The commercial crude inventory is about 1% below the five-year average for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories jumped by 5.6 million barrels in the week ending July 27. Gasoline inventories decreased by 791,000 barrels and distillate stockpiles rose by about 2.9 million barrels. For the same period, analysts expected crude inventories to decrease by about 2.8 million barrels. Gasoline inventories were seen down by 1.3 million barrels and distillate inventories were expected to rise by 930,000 barrels.

Oil prices fell more in July than in any other month this year. The first two days of this week were illustrative: Monday saw a gain of more than 1% in the price of West Texas Intermediate (WTI); Tuesday saw a drop of the same size. Prices are even lower this morning. Whether the Saudis or the Russians or both will raise production is still in question, and every little nuance causes price movements far beyond the value of the chatter. Maybe things will calm down soon. Or not.

Total gasoline inventories decreased by 2.5 million barrels last week, according to the EIA, and are now about 3% above the five-year average range. U.S. refineries produced about 10.5 million barrels of gasoline a day last week, up about 200,000 barrels compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9.7 million barrels a day for the past four weeks, flat compared with the prior week.

Before the EIA report, benchmark WTI crude for September delivery traded down about 1.4% at around $67.80 a barrel, and it rose to around $67.88 (down about 1.3%) shortly after the report’s release. WTI settled at $68.76 on Tuesday and opened at $68.47 Wednesday morning. The 52-week range on September futures is $47.64 to $72.98.

Week over week, U.S. crude oil exports fell by 1.37 million barrels a day last week and U.S. production dipped by 100,000 barrels a day to 10.9 million. Exports averaged 1.31 million barrels a day last week and have a cumulative daily average for the year of 1.83 million barrels a day, a 139% increase over the year-ago export total.

Distillate inventories rose by 3 million barrels last week and are about 11% below the five-year average range for this time of year. Distillate product supplied averaged 3.9 million barrels a day for the past four weeks, down by about 200,000 barrels a day compared with the prior week. Distillate production averaged 5.2 million barrels a day last week, flat compared to the prior week’s production.

For the past week, crude imports averaged 7.7 million barrels a day, down by 21,000 a day compared with the previous week. Refineries were running at 96.1% of capacity, with daily input averaging 17.2 million barrels a day, about 195,000 more than the previous week’s average. Exports of refined products fell by 340,000 barrels a day last week to 5.03 million.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.869, up more than two cents from $2.846 a week ago and more than a penny higher compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.32 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 0.9%, at $80.80 in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded up about 0.8%.

Chevron Corp. (NYSE: CVX) traded down about 0.4%, at $125.78 in a 52-week range of $105.30 to $133.88. As of last night’s close, Chevron shares are trading up about 13.5% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded down about 0.6%, at $14.20 in a 52-week range of $9.34 to $15.25.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 0.1%, at $25.97 in a 52-week range of $21.70 to $29.87.