Crude Oil Price Holds On to Gain 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 decreased by 500,000 barrels last week, maintaining a total U.S. commercial crude inventory of 441.5 million barrels. The commercial crude inventory remains about 7% higher than the five-year average for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories increased by about 3.5 million barrels in the week ending December 14. Gasoline inventories increased by about 1.8 million barrels and distillate stockpiles fell by about 3.4 million barrels. For the same period, analysts expected crude inventories to fall by about 2.5 million barrels. Gasoline inventories were seen up about a million barrels and distillate inventories were expected to rise by about 391,000 barrels.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for January delivery traded up about 2.3% for the day at around $47.33 a barrel, and it traded at $47.44 shortly after the report’s release. WTI for January delivery opened at $46.16 Wednesday morning, up about 2.1% from Wednesday’s settlement price of $46.24. The 52-week range on January futures is $45.79 to $76.55.

The announced cuts to production by OPEC and its partners have not been able to overcome traders’ continuing worries that demand won’t be keeping up with supply. The global economy is slowing down, partly due to ongoing trade disputes and partly to tighter money. If supply continues to exceed demand, OPEC+ may not be able to agree on further production cuts. U.S. production may slow down if the price drops far enough, but at projected price levels, U.S. output is set to rise to more than 12 million barrels a day next year.

Total gasoline inventories increased by 1.8 million barrels last week, according to the EIA, and remain about 3% above the five-year average range. U.S. refineries produced about 10.3 million barrels of gasoline a day last week, down by around 200,000 barrels compared with the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged 9.1 million barrels a day for the past four weeks, roughly flat compared with the prior week’s average.

U.S. crude oil exports rose by 51,000 barrels a day last week, and U.S. production was unchanged at 11.6 million barrels a day. Exports averaged 2.33 million barrels a day last week and have a cumulative daily average for the year of 1.94 million barrels a day, a 101% increase over the year-ago export total.

Distillate inventories decreased by 4.2 million barrels last week and are now about 11% 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, down by about 100,000 barrels a day compared with the prior week’s production.

For the past week, crude imports averaged 7.4 million barrels a day, up by 30,000 barrels a day compared with the previous week. Refineries were running at 95.4% of capacity, with daily input averaging 17.4 million barrels a day, down by about 28,000 barrels a day compared with the previous week’s average. Exports of refined products fell by 88,000 barrels a day last week to about 5.45 million barrels a day.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.369, down nearly four cents from $2.407 a week ago and down by about 26 cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.422 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 0.9%, at $72.62 in a 52-week range of $71.62 to $89.30. Over the past 12 months, Exxon stock has traded down by about 12%.

Chevron Corp. (NYSE: CVX) traded up about 0.8%, at $110.65 in a 52-week range of $108.02 to $133.88. As of last night’s close, Chevron shares are trading down about 7.4% over the past year.

The United States Oil ETF (NYSEARCA: USO) traded up about 2.7% to $10.05, in a 52-week range of $9.73 to $16.24.

The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded up about 1.7%, at $15.46 in a 52-week range of $15.11 to $29.87.