Crude Oil Price Creeps Higher Despite Another Massive Inventory Build

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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 increased by 10.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 442.1 million barrels. The commercial crude inventory is now about 5% higher than the five-year average for this time of year.

Wednesday evening the American Petroleum Institute reported that crude inventories increased by about 8.79 million barrels in the week ending November 9. Gasoline inventories increased by 188,000 barrels, and distillate stockpiles dropped by about 3.22 million barrels. For the same period, analysts expected crude inventories to increase by about 3.01 million barrels. Gasoline inventories were seen down about 1.38 million barrels, and distillate inventories also were expected to fall, by about 1.6 million barrels.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for December delivery traded up about 1.1% for the day at around $56.87 a barrel, and it traded at $56.64 shortly after the report’s release. WTI for December delivery opened at $55.88 Thursday morning, down about 0.7% from Wednesday’s settlement price of $56.25. The 52-week range on December futures is $53.84 to $76.72.

Higher production estimates for the United States, Saudi Arabia and Russia, combined with the Trump administration’s waivers for eight Iranian crude oil customers, continue to push oil prices down. The Saudis and the Russians are discussing cutting production by up to 1.4 million barrels a day. If that happens, the oil market game of whack-a-barrel will begin again.

Total gasoline inventories decreased by 1.4 million barrels last week, according to the EIA, and are now 7% above the five-year average range. U.S. refineries produced about 10.1 million barrels of gasoline a day last week, up by around 400,000 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, about flat compared with the prior week’s average.

Week over week, U.S. crude oil exports fell by 355,000 barrels a day last week and U.S. production rose by 100,000 barrels to 11.7 million barrels a day, its highest level ever. Exports averaged 2.05 million barrels a day last week and have a cumulative daily average for the year of 1.89 million barrels a day, a 108% increase over the year-ago export total.

Distillate inventories fell by 3.6 million barrels last week and are about 8% below the five-year average range for this time of year. Distillate product supplied averaged 4.3 million barrels a day for the past four weeks, up by about 200,000 barrels compared with the prior week’s average. Distillate production averaged 5 million barrels a day last week, unchanged compared with the prior week’s production.

For the past week, crude imports averaged 7.5 million barrels a day, down by 87,000 barrels a day compared with the previous week. Refineries were running at 90.1% of capacity, with daily input averaging 16.4 million barrels a day, about 24,000 barrels a day more than the previous week’s average. Exports of refined products fell by 527,000 barrels a day last week to about 4.41 million barrels a day.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.666, down about seven cents from $2.735 a week ago and down by nearly 23 cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.564 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 $77.19 in a 52-week range of $72.16 to $89.30. Over the past 12 months, Exxon stock has traded down by about 4.7%.

Chevron Corp. (NYSE: CVX) traded up about 0.4%, at $115.01 in a 52-week range of $108.02 to $133.88. As of last night’s close, Chevron shares are trading down about 1% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded up about 1.4%, at $12.12 in a 52-week range of $11.03 to $16.24.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded up about 1.3%, at $19.10 in a 52-week range of $18.60 to $29.87.