Crude Oil Prices React to Kuwait’s Comments and Inventory Data
API crude oil inventories
The API (American Petroleum Institute) released its weekly crude oil inventory report on April 5, 2016. It estimated that the US crude oil inventory fell by 4.3 MMbbls (million barrels) for the week ending April 1, 2016, compared to the previous week. In contrast, the crude oil inventories at Cushing, Oklahoma, rose by 0.32 MMbbls for the same period. To learn more about Cushing crude oil inventories, read How Cushing Inventories Could Affect Crude Oil Prices.
EIA crude oil inventories
Traders closely watch API data, which are a precursor to EIA (U.S. Energy Information Administration) inventory data. The EIA is scheduled to release its weekly crude inventory data today. The government agency reported that the US crude oil inventory rose by 2.3 MMbbls to 534.8 MMbbls between March 18, 2016, and March 25, 2016. This is the US crude oil inventory’s highest level.
The rise in crude oil inventories impacts storage costs. For more on this, read Crude Oil Storage Costs Rose 9 Times, US Crude Tests New Limits and Record US Crude Oil Inventory Led to a New Storage Space.
Crude oil inventory estimates
Polls by the Wall Street Journal and Reuters suggest that the US crude oil inventory rose by 3.2 MMbbls for the week ending April 1. Platts estimates that the crude oil inventory rose by 2.9 MMbbls for the same period. Crude oil inventories are 14% more than in the same period in 2015. The estimates of rising US crude oil inventories could add pressure to crude oil prices.
The contango market and record nationwide crude oil inventories support crude oil tanker companies like Frontline (FRO) and DHT Holdings (DHT).
Multiyear low crude oil prices affect oil producers like QEP Resources (QEP), Synergy Resources (SYRG), Range Resources (RRC), WPX Energy (WPX), and Halcón Resources (HK). For more information on US energy companies’ financial woes, read US Oil and Gas Companies’ Debt Exceeds $200 Billion and Crude Oil’s Total Cost of Production Impacts Major Oil Producers.
The volatility in crude oil prices affects ETFs and ETNs like the United States Oil Fund (USO), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bear 3x ETF (ERY), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), and the Fidelity MSCI Energy Index ETF (FENY).
Read the next part of this series to learn about gasoline and distillate inventories.
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