30 Aug

Will Gasoline and Distillate Inventories Support Crude Oil Bulls?

WRITTEN BY Gordon Kristopher FEATURED IN Commodities

Crude oil futures  

October US crude oil (OIH) (XLE) (IYE) futures contracts fell 0.3% to $46.31 per barrel in early electronic trading on August 30, 2017. Prices fell due to the expectation of a weak demand due to Tropical Storm Harvey.

US crude oil prices are now at a five-week low. Lower crude oil prices have had a negative impact on oil and gas producers like W&T Offshore (WTI), Contango Oil & Gas (MCF), Denbury Resources (DNR), and Cobalt International Energy (CIE).

Will Gasoline and Distillate Inventories Support Crude Oil Bulls?

API’s Cushing crude oil inventories 

On August 29, 2017, the API (American Petroleum Institute) released its weekly crude oil inventory report, announcing that Cushing crude oil inventories rose 0.58 MMbbls (million barrels) between August 18, 2017, and August 25, 2017.

Cushing is the largest storage hub in the US. A rise in Cushing crude oil inventories could pressure crude oil (XOP) (SCO) prices.

API’s gasoline and distillate inventories 

The API also reported that US gasoline inventories rose 476,000 barrels between August 18, 2017, and August 25, 2017. However, market surveys estimated that US gasoline inventories would fall 989,000 barrels during this period.

The API also estimates that US distillate inventories fell 486,000 barrels between August 18, 2017, and August 25, 2017. A market survey estimated that distillate inventories would fall 846,000 barrels during that period.

EIA crude oil inventory report  

The EIA (US Energy Information Administration) released its crude oil inventory report on Wednesday, August 30, 2017, at 10:30 AM.

US crude oil inventories are now ~14% below their peak and are also below their five-year range. A better-than-expected fall in crude oil and product inventories could benefit crude oil, gasoline, and diesel prices.

In the next part, we’ll analyze US gasoline futures.

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