EIA Report: Crude Oil, Gas Inventories Surged Last Week
Crude oil inventories
On January 13, 2016, the EIA (U.S. Energy Information Administration) released its Weekly Petroleum Status Report, stating that US crude oil inventories rose by 0.2 MMbbls (million barrels) to 482.6 MMbbls for the week ended January 8.
Analysts were expecting a rise of 2.0 MMbbls for the week. The current inventory levels are 24.4 MMbbls more than during the same period last year.
Crude oil production and imports
The EIA reported that US crude oil production for the week ended January 8, 2016, rose slightly, by 0.01 MMbpd (million barrels per day), as compared to the previous week ended January 1, 2016. Crude oil production is at 9.22 MMbpd as of the week ended January 8. This level is ~0.3% higher than last year’s production level of 9.19 MMbpd.
Net US crude oil imports rose by 0.67 MMbpd to ~8.2 MMbpd in the week ended January 8. This level is ~9.2% higher than last year’s level of 7.5 MMbpd.
Crude oil inventory builds in the last week
Crude oil production and imports rose last week. Though lower crude oil prices pulled back production levels, production levels slightly rose. However, the worrying factor is imports, which rose by around 0.6 MMbpd, almost 10% more than the same time last year.
The rise in imports indicates more crude oil supplies, which add a further glut in the crude oil markets. As a result, WTI (West Texas Intermediate) crude oil prices (USO) will be impacted.
The rise in imports was bearish for US crude oil producers such as Cimarex Energy (XEC), Occidental Petroleum (OXY), Murphy Oil (MUR), Apache (APA), and Chevron (CVX). Because the rise in imports impacts the production volumes of domestic oil producers, the fall in production volumes lowers their profitability.
The crude oil inventory builds in the last week were mainly due to the rises in crude supplies and imports. At the same time, crude oil demand fell because of more-than-sufficient gasoline and distillate inventory builds.
We’ll have a detailed discussion on refinery inputs in the next part of this series.
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