Massive Rise in Crude Oil Inventory Sends Prices Tumbling
ThinkstockThe U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 5 million barrels last week, maintaining a total U.S. commercial crude inventory at 361.7 million barrels. Crude inventory remains in…
The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 5 million barrels last week, maintaining a total U.S. commercial crude inventory at 361.7 million barrels. Crude inventory remains in the upper half of the five-year range for this time of the year.
Total gasoline inventories increased by 1.2 million barrels last week and remain in the middle of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged 8.7 million barrels a day for the past four weeks, down by 1.3% compared with the same period a year ago.
Distillate inventories increased by 400,000 barrels last week and remain in the lower half of the average range. Distillate product supplied averaged about 3.8 million barrels a day over the past four weeks, down by 0.6% when compared with the same period last year. Distillate production averaged 4.7 million barrels a day last week, down 200,000 barrels a day from the prior week’s production.
Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 5.1 million barrels in the week ending October 3, together with a rise of 2.5 million barrels in gasoline supplies and a decline of 1.1 million barrels in distillate supplies. For the same period, analysts had estimated an increase of 1.9 million barrels in crude inventories, a drop of 900,000 barrels in the gasoline supply and a decline of 1.2 million barrels in distillate inventories.
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Before the EIA report, West Texas Intermediate (WTI) crude was trading down about 1.7% at around $86.50 a barrel, more than a dollar below Tuesday’s closing price of $87.98. The WTI price fell further to around $86.20 shortly after the report was released.
For the past week, crude imports averaged more than 7.7 million barrels a day, up about 428,000 barrels a day compared with the previous week. Refineries were running at 89.3% of capacity, with daily input of about 15.6 million barrels a day, about 355,000 barrels a day below the previous week’s average.
WTI crude prices have tumbled more than $3 a barrel since last week. Refinery throughput has dropped for a second straight week. Pump prices continue to fall as consumer demand weakens.
According to AAA, the current national average pump price per gallon of regular gasoline is $3.267, down from $3.333 a week ago and from $3.438 a month ago. Last year a gallon of regular cost $3.349 on average in the United States.
Here is a look at how share prices at three U.S. producers are reacted to this latest report.
Exxon Mobil Corp. (NYSE: XOM) traded down about 0.9%, at $92.59 in a 52-week range of $84.79 to $104.76.
Chevron Corp. (NYSE: CVX) traded down about 0.6%, at $115.33 in a 52-week range of $109.27 to $135.10.
Continental Resources Inc. (NYSE: CLR) traded down about 1.8% to $60.73. The stock’s 52-week range is $50.13 to $80.91. Continental is the largest producer in the Bakken shale play.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.