The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning, showing that U.S. commercial crude inventories decreased by 1.4 million barrels last week, maintaining a total U.S. commercial crude inventory of 407.4 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 dropped by 6 million barrels in the week ending August 3. Gasoline inventories increased by 3.1 million barrels and distillate stockpiles rose by about 1.8 million barrels. For the same period, analysts expected crude inventories to decrease by about 3.3 million barrels. Gasoline inventories were seen down by 1.7 million barrels, and distillate inventories were expected to rise by 220,000 barrels.
The Trump administration on Tuesday imposed a first round of new sanctions on Iran. A second round is scheduled to begin in November. It is that second round that will have a greater impact on Iran’s oil and gas industry. Tuesday’s sanctions primarily hit Iran’s ability to function in global financial markets. The impact on the Iranian economy is expected to be harsh and the restrictions on oil and gas exports are expected to be harsher still.
Total gasoline inventories increased by 2.9 million barrels last week, according to the EIA, and are now about 4% above the five-year average range. U.S. refineries produced about 9.9 million barrels of gasoline a day last week, down by about 600,000 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 West Texas Intermediate (WTI) crude for September delivery traded down about 2% at around $68.00 a barrel and dropped further to around $67.57 (down about 2.3%) shortly after the report’s release. WTI settled at $69.17 on Tuesday and opened at $69.11 Wednesday morning. The 52-week range on September futures is $47.64 to $72.98.
Week over week, U.S. crude oil exports rose by 540,000 barrels a day, and U.S. production dipped by 100,000 barrels a day to 10.8 million barrels. Exports averaged 1.85 million barrels a day last week and have a cumulative daily average for the year of 1.83 million barrels a day, a 140% increase over the year-ago export total.
Distillate inventories rose by 1.2 million barrels last week and are about 10% below the five-year average range for this time of year. Distillate product supplied averaged 4 million barrels a day for the past four weeks, up by about 100,000 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 7.9 million barrels a day, up by 182,000 compared with the previous week. Refineries were running at 96.6% of capacity, with daily input averaging 17.6 million barrels a day, about 118,000 more than the previous week’s average. Exports of refined products rose by 174,000 barrels a day last week to 5.2 million.
According to AAA, the current national average pump price per gallon of regular gasoline is $2.865, down by less than a penny from $2.869 a week ago and flat compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.351 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 0.8%, at $80.62 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 0.8%, at $124.24 in a 52-week range of $105.30 to $133.88. As of last night’s close, Chevron shares are trading up about 12.5% over the past year.
The United States Oil ETF (NYSEARCA: USO) traded down about 1.9%, at $14.09 in a 52-week range of $9.34 to $15.25.
The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 0.3%, at $25.64 in a 52-week range of $21.70 to $29.87.