Crude Oil Price Dips Following Inventory Report

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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 1.9 million barrels last week, maintaining a total U.S. commercial crude inventory of 396 million barrels. The commercial crude inventory is down about 2% compared with the five-year average for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories increased by about 2.9 million barrels in the week ending September 21. Gasoline inventories increased by 950,000 barrels and distillate stockpiles slipped by about 944,000 barrels. For the same period, analysts expected crude inventories to decrease by about 1.3 million barrels. Gasoline inventories were seen up about 790,000 barrels and distillate inventories were expected to rise by about 750,000 barrels.

Earlier this week a few analysts and trading houses were floating the notion that Brent crude could reach $100 a barrel in the near term. On Tuesday, BP and Goldman Sachs both pooh-poohed that idea. Both believe that production increases from OPEC and Russia will offset lost Iranian production. There also has been some speculation that the president will authorize another release from the U.S. Strategic Petroleum Reserve.

Total gasoline inventories increased by 1.5 million barrels last week, according to the EIA, and remain about 8% above the five-year average range. U.S. refineries produced about 9.8 million barrels of gasoline a day last week, down by 500,000 barrels compared with the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9.5 million barrels a day for the past four weeks, down by about 200,000 barrels compared with the prior week’s average.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for November delivery traded down about 0.6%, at around $71.78 a barrel, and it traded at $71.83 shortly after the report’s release. WTI for November delivery opened at $72.03 Wednesday morning, down about 0.3% from Tuesday’s settlement price of $72.28. The 52-week range on November futures is $51.27 to $72.78.

Week over week, U.S. crude oil exports rose by 273,000 barrels a day last week, and U.S. production rose from 11.0 million barrels a day to 11.1 million barrels. Exports averaged 2.64 million barrels a day last week and have a cumulative daily average for the year of 1.83 million barrels a day, a 134% increase over the year-ago export total.

Distillate inventories fell by 2.2 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, unchanged compared with the prior week’s average. Distillate production averaged 5 million barrels a day last week, down by 500,000 barrels compared to the prior week’s production.

For the past week, crude imports averaged 7.88 million barrels a day, down by 222,000 compared with the previous week. Refineries were running at 90.4% of capacity, with daily input averaging 16.5 million barrels a day, about 901,000 less than the previous week’s average. Exports of refined products fell by 26,000 barrels a day last week to 5.22 million.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.867, up 2.4 cents from $2.843 a week ago and up by 2.8 cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.568 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 0.4%, at $86.19 in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded up about 6.6%.

Chevron Corp. (NYSE: CVX) traded down about 0.1%, at $123.20 in a 52-week range of $108.02 to $133.88. As of last night’s close, Chevron shares are trading up about 4.9% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded down about 0.3%, at $15.23 in a 52-week range of $9.92 to $15.36.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 1%, at $25.41 in a 52-week range of $22.73 to $29.87.