Why Traders Watch the API’s Crude Oil Inventory Data
Crude Oil Market's Collateral Damage Continues, OPEC Adds to the Glut
API’s crude oil inventory data
The API (American Petroleum Institute) is scheduled to release its weekly crude oil, gasoline, and distillates inventory report on October 14, 2015. It reported that crude oil stocks fell by 1.2 MMbbls (million barrels) for the week ending October 2, 2015. In contrast, crude oil stocks rose by 4.6 MMbbls for the week ending September 25, 2015.
Impact
Traders watch the API’s crude oil inventory data closely. The API data are the precursor to the EIA’s (U.S. Energy Information Administration) weekly petroleum status report. The EIA will release its next crude oil inventory report on October 15, 2015. Last week, the crude inventory rose by 3.1 MMbbls to 461 MMbbls for the week ending October 2, 2015. Gasoline stocks rose by 1.91 MMbbls for the same period. In contrast, distillates stocks fell by 2.5 MMbbls for the week ending October 2.
The preliminary surveys from Bloomberg estimate that crude oil stocks could rise by 2.58 MMbbls for the week ending October 9, 2015. In contrast, gasoline and distillate stocks are estimated to fall by 1.8 MMbbls and 0.57 MMbbls for the same period. Currently, the US crude oil inventory is 28% more than the level of 361 MMbbls in 2014. It’s also near the 80-period high during this time of the year.
The record US inventory and consensus of rising crude oil stocks would put downward pressure on crude oil prices. Falling crude oil prices impact upstream players’ margins like Noble Energy (NBL), EOG Resources (EOG), and Anadarko Petroleum (APC). These stocks’ crude oil production mix is more than 41% of their total production.
The roller coaster ride of crude oil prices also impacts ETFs like the iShares U.S. Oil & Gas Exploration & Production ETF (IEO). Falling crude oil prices benefit ETFs like the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).
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