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Here's What the EIA's Latest Crude Inventory Report Revealed
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U.S. oil prices finished higher after a weekly report from the Energy Information Administration ("EIA") showed a stockpile draw. The fall in domestic oil stocks was accompanied by a decrease in gasoline inventories. Prices were also boosted by a weaker dollar, which made the fuel cheaper to the holders of other currencies. However, the commodity pared back some of its gains following calls from the White House for the OPEC+ cartel to increase oil production.
On the New York Mercantile Exchange, WTI crude futures moved up 96 cents or 1.4%, to settle at $69.25 a barrel.
Below we review the EIA's Weekly Petroleum Status Report for the week ending Aug 6.
Analyzing the Latest EIA Report
Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 448,000 barrels compared to expectations of a 600,000-barrels decline per the analysts surveyed by S&P Global Platts. An uptick in demand and surge in exports accounted for the stockpile draw with the world’s biggest oil consumer. This puts total domestic stocks at 438.8 million barrels — 14.6% less than the year-ago figure and 6% lower than the five-year average.
The latest report also showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) were down 325,000 barrels at 34.6 million barrels.
Meanwhile, the crude supply cover was down slightly from 27.5 days in the previous week to 27.4 days. In the year-ago period, the supply cover was 35.4 days.
Let’s turn to the products now.
Gasoline: Gasoline supplies decreased for the fourth week in a row. The 1.4-million-barrel drop is attributable to falling production and higher imports even as demand dipped. Analysts had forecast that gasoline inventories would fall by 2.4 million barrels. At 227.5 million barrels, the current stock of the most widely used petroleum product is 7.9% less than the year-earlier level and 3% below the five-year average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) climbed for the second time in as many weeks. The 1.8-million-barrel rise reflected an increase in imports and production that more than offset the strong demand. Meanwhile, the market looked for a supply contraction of 600,000 barrels. Despite the build, current inventories — at 140.5 million barrels — are 20.9% below the year-ago level and 6% less than the five-year average.
Refinery Rates: Refinery utilization, at 91.8%, was up 0.5% from the prior week.
Wrapping Up
Oil prices settled up on Wednesday, as investors focused on the improving fundamentals in the energy market. U.S. commercial stockpiles are down nearly 13% since mid-March. Taking Cushing as an indicator, the oil market has already tightened considerably. Stocks have fallen under 35 million barrels at the key storage hub, the lowest since November 2018. There is also a marked improvement in gasoline demand on the back of rebounding road and airline travel. With all the tailwinds, the U.S. benchmark briefly hit a more than six-year high of $76.98 in July.
The improvement in crude prices helped energy companies report a stellar second quarter by posting blowout earnings. The likes of ExxonMobil (XOM - Free Report) , Chevron (CVX - Free Report) , Royal Dutch Shell and BP plc (BP - Free Report) came up with bottom lines that comfortably exceeded expectations. The environment of strong oil prices also helped the energy operators to generate significant “excess cash,” which they are using to boost investor returns through dividends and buybacks.
For example, the board of directors of BP recently approved a dividend hike of 4% to 5.46 cents per ordinary share. Before announcing results for the third quarter, Zacks Rank #1 (Strong Buy) BP plans to buy back $1.4 billion worth of shares by utilizing surplus cashflow that was generated through the January-to-June period. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Here's What the EIA's Latest Crude Inventory Report Revealed
U.S. oil prices finished higher after a weekly report from the Energy Information Administration ("EIA") showed a stockpile draw. The fall in domestic oil stocks was accompanied by a decrease in gasoline inventories. Prices were also boosted by a weaker dollar, which made the fuel cheaper to the holders of other currencies. However, the commodity pared back some of its gains following calls from the White House for the OPEC+ cartel to increase oil production.
On the New York Mercantile Exchange, WTI crude futures moved up 96 cents or 1.4%, to settle at $69.25 a barrel.
Below we review the EIA's Weekly Petroleum Status Report for the week ending Aug 6.
Analyzing the Latest EIA Report
Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 448,000 barrels compared to expectations of a 600,000-barrels decline per the analysts surveyed by S&P Global Platts. An uptick in demand and surge in exports accounted for the stockpile draw with the world’s biggest oil consumer. This puts total domestic stocks at 438.8 million barrels — 14.6% less than the year-ago figure and 6% lower than the five-year average.
The latest report also showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) were down 325,000 barrels at 34.6 million barrels.
Meanwhile, the crude supply cover was down slightly from 27.5 days in the previous week to 27.4 days. In the year-ago period, the supply cover was 35.4 days.
Let’s turn to the products now.
Gasoline: Gasoline supplies decreased for the fourth week in a row. The 1.4-million-barrel drop is attributable to falling production and higher imports even as demand dipped. Analysts had forecast that gasoline inventories would fall by 2.4 million barrels. At 227.5 million barrels, the current stock of the most widely used petroleum product is 7.9% less than the year-earlier level and 3% below the five-year average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) climbed for the second time in as many weeks. The 1.8-million-barrel rise reflected an increase in imports and production that more than offset the strong demand. Meanwhile, the market looked for a supply contraction of 600,000 barrels. Despite the build, current inventories — at 140.5 million barrels — are 20.9% below the year-ago level and 6% less than the five-year average.
Refinery Rates: Refinery utilization, at 91.8%, was up 0.5% from the prior week.
Wrapping Up
Oil prices settled up on Wednesday, as investors focused on the improving fundamentals in the energy market. U.S. commercial stockpiles are down nearly 13% since mid-March. Taking Cushing as an indicator, the oil market has already tightened considerably. Stocks have fallen under 35 million barrels at the key storage hub, the lowest since November 2018. There is also a marked improvement in gasoline demand on the back of rebounding road and airline travel. With all the tailwinds, the U.S. benchmark briefly hit a more than six-year high of $76.98 in July.
The improvement in crude prices helped energy companies report a stellar second quarter by posting blowout earnings. The likes of ExxonMobil (XOM - Free Report) , Chevron (CVX - Free Report) , Royal Dutch Shell and BP plc (BP - Free Report) came up with bottom lines that comfortably exceeded expectations. The environment of strong oil prices also helped the energy operators to generate significant “excess cash,” which they are using to boost investor returns through dividends and buybacks.
For example, the board of directors of BP recently approved a dividend hike of 4% to 5.46 cents per ordinary share. Before announcing results for the third quarter, Zacks Rank #1 (Strong Buy) BP plans to buy back $1.4 billion worth of shares by utilizing surplus cashflow that was generated through the January-to-June period. You can see the complete list of today’s Zacks #1 Rank stocks here.