Crude Oil Price Holds Gains as Gasoline, Diesel Inventory Gains Outweigh Crude Decline

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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 5.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 396.2 million barrels. The commercial crude inventory is down about 3% compared with the five-year average for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories tumbled by about 8.6 million barrels in the week ending September 7. Gasoline inventories increased by 2.2 million barrels and distillate stockpiles rose by about 5.8 million barrels. For the same period, analysts expected crude inventories to decrease by about 2.7 million barrels. Gasoline inventories were seen flat and distillate inventories were expected to rise by about 2.3 million barrels.

Geopolitical concerns have been sending prices higher this week. As the date draws nearer for new U.S. sanctions against Iran, traders are loading up on futures and options, pushing prices higher. Where two weeks ago the current spot price was about 20 cents a barrel higher than the December futures price, the price curve now shows December futures trading about 50 cents a barrel higher than the current spot price.

Total gasoline inventories increased by 1.3 million barrels last week, according to the EIA, and are now about 8% above the five-year average range. U.S. refineries produced about 10.4 million barrels of gasoline a day last week, up by 200,000 compared with 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, unchanged compared with the prior week’s average.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for October delivery traded up about 1.6% at around $70.36 a barrel and rose to around $70.54 (up about 1.9%) shortly after the report’s release. WTI for October delivery opened at $69.83 Wednesday morning, up about 0.8% from Tuesday’s settlement price of $69.25. The 52-week range on October futures is $50.06 to $71.63.

Week over week, U.S. crude oil exports jumped by 321,000 barrels a day last week and U.S. production dipped from 11.0 million barrels a day to 10.9 million. Exports averaged 1.83 million barrels a day last week and have a cumulative daily average for the year of 1.8 million barrels a day, a 137% increase over the year-ago export total.

Distillate inventories rose by 6.2 million barrels last week and are now about 3% 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, down by 200,000 barrels compared with the prior week’s average. Distillate production averaged 5.5 million barrels a day last week, up by 100,000 compared to the prior week’s production.

For the past week, crude imports averaged 7.6 million barrels a day, down by 123,000 compared with the previous week. Refineries were running at 97.6% of capacity, with daily input averaging 17.9 million barrels a day, about 210,000 more than the previous week’s average. Exports of refined products rose by 799,000 barrels a day last week to 4.86 million barrels a day.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.839, down less than a penny from $2.843 a week ago and down by nearly 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 up about 1.0% to $83.66, in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded up about 5.2%.

Chevron Corp. (NYSE: CVX) traded up about 2.1%, at $117.42 in a 52-week range of $108.02 to $133.88. As of last night’s close, Chevron shares are trading up about 4.4% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded up about 2.1%, at $14.90 in a 52-week range of $9.89 to $15.25.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded up about 2.0%, at $24.21 in a 52-week range of $22.73 to $29.87.