U.S. Crude Oil Inventories Increased 3.6M vs 0.6M Expected

by Ike Obudulu Posted on November 28th, 2018

Washington D.C., USA: U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.6 million barrels (vs 0.6 million barrels expected) from the previous week. At 450.5 million barrels, U.S. crude oil inventories are about 7% above the five year average for this time of year.

Total motor gasoline inventories decreased by 0.8 million barrels last week and are about 5% above the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories increased by 2.6 million barrels last week and are about 6% below the five year average for this time of year. Propane/propylene inventories decreased by 0.6 million barrels last week and are about 3% below the five year average for this time of year. Total commercial petroleum inventories increased last week by 2.4 million barrels last week.

U.S. crude oil refinery inputs averaged 17.6 million barrels per day during the week ending November 23, 2018, which was 698,000 barrels per day more than the previous week’s average. Refineries operated at 95.6% of their operable capacity last week. Gasoline production increased last week, averaging 10.2 million barrels per day. Distillate fuel production increased last week, averaging 5.5 million barrels per day.

U.S. crude oil imports averaged 8.2 million barrels per day last week, up by 608,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.7 million barrels per day, 0.8% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 384,000 barrels per day, and distillate fuel imports averaged 186,000 barrels per day.

Total products supplied over the last four-week period averaged 21.1 million barrels per day, up by 5.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.2 million barrels per day, down by 0.9% from the same period last year. Distillate fuel product supplied averaged 4.2 million barrels per day over the past four weeks, up by 2.0% from the same period last year. Jet fuel product supplied was up 4.1% compared with the same four-week period last year.

Why Markets Care About crude oil inventories (Crude Stocks, Crude Levels)

Crude Oil Inventories (Crude Stocks, Crude Levels) measures change in the number of barrels of crude oil held in inventory by commercial firms during the past week

It is released released weekly, 4 days after the week ends by the Energy Information Administration (EIA)

There is no consistent effect as there are both inflationary and growth implications. While this is a US indicator, it most affects the loonie due to Canada’s sizable energy sector.

Crude oil inventories (crude stocks, crude levels) is the primary gauge of supply and demand imbalances in the market, which can lead to changes in production levels and price volatility.

Crude Oil slips on U.S. inventories

Oil slipped to about 60 dollars a barrel on Wednesday, pressured by rising U.S. inventories and doubts over whether an OPEC-led output cut will be agreed next week.

U.S. crude stockpiles rose last week, the American Petroleum Institute (API) industry group said on Tuesday before Saudi Arabia dampened hopes of production cuts by OPEC and its allies by saying on Wednesday that it would not act alone.

The outcome of next week’s OPEC meeting “remains clouded by uncertainty”, said Stephen Brennock of oil broker PVM.

Brent crude LCOc1, the global benchmark, fell 27 cents to 59.94 dollars barrel at 1119 GMT after trading as high as 61.27 dollars. U.S. crude CLc1 was down 10 cents at 51.46 dollars.

The price of Brent has slumped by more than 30 per cent from a four-year high above 86 dollars in early October, pressured by concerns that supply will exceed demand in 2019 as economic growth slows.

The Organisation of the Petroleum Exporting Countries (OPEC) plus Russia and other allies will on Dec. 6 to Dec. 7.

Producers are discussing a supply curb of 1 million to 1.4 million barrels per day (bpd) and possibly more, OPEC delegates have told Reuters.

“OPEC needs to cut if it wants the market to be a little less oversupplied in the first half of 2019,” said Petromatrix analyst Olivier Jakob.

The slump since October is on a par with the 2008 price crash and steeper than that of 2014 to 2015, both of which prompted OPEC to agree output curbs to support the market.

The OPEC meeting in Vienna will follow a gathering by the Group of 20 (G20) nations in Argentina this weekend, at which oil policy is expected to be discussed, potentially laying the groundwork for an OPEC deal.

The market gained support from a supply outage in the North Sea home to the crude that underpins the Brent contract. The Buzzard oilfield, the UK’s largest, has closed temporarily, prompting the cancellation of some cargoes.

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