Crude Oil Price Rebounds Slightly on Another Big 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 6 million barrels last week, maintaining a total U.S. commercial crude inventory of 410 million barrels. The commercial crude inventory is equal to the five-year average for this time of year.

Wednesday evening the American Petroleum Institute (API) reported that crude inventories increased by about 9.75 million barrels in the week ending October 5. Gasoline inventories increased by 3.4 million barrels and distillate stockpiles dropped by about 3.5 million barrels. For the same period, analysts expected crude inventories to increase by about 2.62 million barrels. Gasoline inventories were seen down about 42,000 barrels, and distillate inventories were expected to fall by about 2 million barrels.

In this month’s Short-Term Energy Outlook, published Wednesday, the agency forecast West Texas Intermediate (WTI) crude oil prices to rise from an average of $50.79 a barrel in 2017 to $68.46 this year, climbing to $69.56 in 2019. Prices for Brent crude are forecast to average $74.43 a barrel this year and about $75.06 a barrel in 2019. The EIA also forecast U.S. production will average 10.7 million barrels a day for 2018, up from a daily average of 9.4 million barrels in 2017. For 2019, the EIA now projects U.S. production will average 11.8 million barrels a day.

Total gasoline inventories increased by a million barrels last week, according to the EIA, and are about 7% above the five-year average range. U.S. refineries produced about 9.7 million barrels of gasoline a day last week, down by 300,000 barrels compared with the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9.2 million barrels a day for the past four weeks, down by about 100,000 barrels compared with the prior week’s average.

Before the EIA report, benchmark WTI crude for November delivery traded down about 2.1% at around $71.63 a barrel, and it traded at $71.72 shortly after the report’s release. WTI for November delivery opened at $72.63 Wednesday morning, down about 0.7% from Tuesday’s settlement price of $73.17. The 52-week range on November futures is $51.27 to $76.90

Week over week, U.S. crude oil exports rose by 853,000 barrels a day last week and U.S. production rose by 100,000 barrels a day to 11.2 million barrels a day. Exports averaged 2.58 million barrels a day last week and have a cumulative daily average for the year of 1.85 million barrels a day, a 124% increase over the year-ago export total.

Distillate inventories fell by 2.7 million barrels last week and are about 4% 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 about 300,000 barrels compared with the prior week’s average. Distillate production averaged 5 million barrels a day last week, flat compared to the prior week’s production.

For the past week, crude imports averaged 7.4 million barrels a day, down by 568,000 compared with the previous week. Refineries were running at 88.8% of capacity, with daily input averaging 16.2 million barrels a day, about 352,000 less than the previous week’s average. Exports of refined products tumbled by 776,000 barrels a day last week to 4.9 million barrels a day.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.91, down a fraction from $2.911 a week ago and up by more than six cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.478 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 2.3%, at $82.60 in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded up less than 1%.

Chevron Corp. (NYSE: CVX) traded down about 2.4%, at $119.64 in a 52-week range of $108.02 to $133.88. As of last night’s close, Chevron shares are also trading up less than 1% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded down about 2.1%, at $15.06 in a 52-week range of $10.13 to $16.24.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 2.1%, at $24.24 in a 52-week range of $22.73 to $29.87.