Inventory Report Crushes Oil Prices


The U.S. Energy Information Administration (EIA) released its weekly petroleum status report this morning. The big news is U.S. crude oil inventories are at their highest level since the EIA began keeping weekly data in August of 1982.

U.S. commercial crude inventories increased by 6.7 million barrels last week, bringing the total U.S. commercial crude inventory to 395.3 million barrels, well above the upper limit of the five-year range for this time of the year.

Total gasoline inventories decreased by 1.8 million barrels last week and have moved down to the middle of the five-year average range. Total motor gasoline supplied averaged more than 8.5 million barrels a day over the past four weeks - a drop of about 1.8% compared with the same period a year ago.

Distillate inventories rose by 470,000 barrels last week and remain in the lower half of the average range. Distillate product supplied averaged 3.7 million barrels a day over the past four weeks, down about 3.7% when compared with the same period last year. Distillate production totaled 4.3 million barrels a day last week, essentially flat compared with the prior week.

The American Petroleum Institute last night reported an inventory surge of 5.2 million barrels in crude supplies last week, together with a decrease of 2.7 million barrels in gasoline supplies and a decline of 1.1 million barrels in distillate supplies. Platts estimated a build of 1.4 million barrels in crude inventories, a drop of 900,000 barrels in gasoline inventories and no change in distillate inventories. A Dow Jones survey forecast a build of 800,000 barrels to crude oil inventories, along with a drop of 600,000 barrels in gasoline stocks and a rise of 300,000 barrels in distillate supplies.

Crude prices were down about 1% before the EIA report at around $91.00 a barrel, and the fell by a further 3% ($0.50 or so) immediately following the report.

For the past week, crude imports averaged more than 8.2 million barrels a day, an increase of about 602,000 barrels a day from the previous week. Refineries were running at 84.4% of capacity, with daily input of 14.7 million barrels a day, about 222,000 barrels a day more than the previous week.

Refining capacity utilization rose in the past week, very likely as refineries along the Gulf Coast put more refined products onto the export market. Gasoline inventories in the United States remain high, which is keeping both crude and gasoline prices in check.

The United States Oil ETF (NYSEMKT: USO) is down 2.8%, at $32.24 in a 52-week range of $29.02 to $40.06.

The United States Gasoline ETF (NYSEMKT: UGA) is down 2.7%, at $53.71, in a 52-week range of $45.13 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) is down 2.3%, at $75.27 in a 52-week range of $63.00 to $88.71.

Filed under: 24/7 Wall St. Wire, Commodities, Oil & Gas, Research