Crude Oil Inventory Booms Again

Total gasoline inventories also increased by 3.5 million barrels last week and remain in the upper half of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged 8.8 million barrels a day over the past four weeks, down 100,000 barrels from the prior week average.

Distillate inventories fell by 1.7 million barrels last week and remain near the lower limit of the average range. Distillate product supplied averaged 3.7 million barrels a day over the past four weeks, up by 1.6% when compared with the same period last year. Distillate production totaled about 4.9 million barrels a day last week, about 100,000 barrels a day more than the prior week.

The American Petroleum Institute last night reported that crude inventories rose by 4.55 million barrels last week, together with a rise of 3.26 million barrels in gasoline supplies and a decrease of 1.57 million barrels in distillate supplies. Platts estimated a rise of 2.4 million barrels in crude inventories, a decline of 1.4 million barrels in gasoline inventories and a decrease of 1.8 million barrels in distillate inventories.

Crude prices were trading higher before the EIA report at around $102.60 a barrel and slipped to around $102.30 shortly after the report was released.

For the past week, crude imports averaged about 8.4 million barrels a day, up about 438,000 barrels a day from the previous week. Refineries were running at 89% of capacity, with daily input of 15.4 million barrels a day, about 146,000 barrels a day lower than the previous week’s total.

Gasoline prices have continued slipping, as we noted Monday. According to the AAA Fuel Gauge report, a gallon of regular gasoline costs about $3.39 today, compared with about $3.45 a week ago. Last month the price was $3.59 a gallon, and one year ago the price of a gallon of regular gasoline was $3.78.

The rise in crude and gasoline inventories will keep pump prices for gasoline on their current downward trend. The federal government shutdown also plays a role as more than 800,000 federal employees no longer have to get to work every day. Refiners are slowing down as well as stocks of crude and gasoline build. Absent any major shock to prices, we expect crude and gasoline prices to continue headed down for at least the rest of this year.

The United States Oil ETF (NYSEMKT: USO) is up 1.2%, at $37.11 in a 52-week range of $30.79 to $39.54.

The United States Gasoline ETF (NYSEMKT: UGA) is down about 0.4%, at $55.52 in a 52-week range of $53.35 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) is up 0.4%, at $42.26 in a 52-week range of $36.88 to $45.05.