Crude Oil Price Wobbles Following In-Line Inventory Report

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning showing that U.S. commercial crude inventories decreased by 4.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 401.5 million barrels. The commercial crude inventory is level with the five-year average for this time of year.

Wednesday evening the American Petroleum Institute (API) reported that crude inventories slipped by about 1.2 million barrels in the week ending August 31. Gasoline inventories increased by 1.0 million barrels and distillate stockpiles rose by about 1.8 million barrels. For the same period, analysts expected crude inventories to decrease by about 1.3 million barrels. Gasoline inventories were seen dipping by 81,000 barrels and distillate inventories were expected to rise by about 740,000 barrels.

Anticipating some disturbances to Gulf of Mexico production sent spot prices higher over the weekend and into early this week. The threat never materialized, at least to virtually every operation in the Gulf. However, a child was killed by a falling tree after the storm made landfall Tuesday night along the Gulf coast of Mississippi, Alabama and Florida. Another factor holding prices in check is Iran’s success in finding markets — including in Europe — for its crude despite U.S. sanctions set to go into full effect in November.

Total gasoline inventories increased by 1.8 million barrels last week, according to the EIA, and are now about 7% above the five-year average range. U.S. refineries produced about 10.2 million barrels of gasoline a day last week, equal to production in each of the prior weeks. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9.7 million barrels a day for the past four weeks, about 100,000 barrels more compared with the prior week’s average.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for October delivery traded down about 0.1% at around $68.60 a barrel, and it rose to around $68.63 shortly after the report’s release. WTI for October delivery opened at $68.63 Wednesday morning, down about 0.1% from Tuesday’s settlement price of $68.72. The 52-week range on October futures is $49.77 to $71.63.

Week over week, U.S. crude oil exports fell by 271,000 barrels a day last week and U.S. production was flat once again at 11 million barrels a day. Exports averaged 1.51 million barrels a day last week and have a cumulative daily average for the year of 1.79 million barrels a day, a 137% increase over the year-ago export total.

Distillate inventories rose by 3.1 million barrels last week and are now about 6% below the five-year average range for this time of year. Distillate product supplied averaged 4.2 million barrels a day for the past four weeks, up by 100,000 barrels compared with the prior week’s average. Distillate production averaged 5.4 million barrels a day last week, up by 200,000 barrels compared to the prior week’s production.

For the past week, crude imports averaged 7.7 million barrels a day, up by 229,000 compared with the previous week. Refineries were running at 96.6% of capacity, with daily input averaging 17.6 million barrels a day, about 81,000 more than the previous week’s average. Exports of refined products fell by 786,000 barrels a day last week to 4.06 million.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.854, up about a penny and a half from $2.838 a week ago and down by more than a penny compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.661 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 0.3%, at $81.087 in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded up about 2.8%.

Chevron Corp. (NYSE: CVX) traded down about 1.7%, at $116.86 in a 52-week range of $108.02 to $133.88. As of last night’s close, Chevron shares were up about 4.4% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded down about 1.1%, at $14.34 in a 52-week range of $9.61 to $15.25.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 1.5% to $23.39, in a 52-week range of $22.81 to $29.87.

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