Massive Rise in Crude Oil Inventory Sends Prices Tumbling

Total gasoline inventories increased by 1.2 million barrels last week and remain in the middle of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged 8.7 million barrels a day for the past four weeks, down by 1.3% compared with the same period a year ago.

Distillate inventories increased by 400,000 barrels last week and remain in the lower half of the average range. Distillate product supplied averaged about 3.8 million barrels a day over the past four weeks, down by 0.6% when compared with the same period last year. Distillate production averaged 4.7 million barrels a day last week, down 200,000 barrels a day from the prior week’s production.

Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 5.1 million barrels in the week ending October 3, together with a rise of 2.5 million barrels in gasoline supplies and a decline of 1.1 million barrels in distillate supplies. For the same period, analysts had estimated an increase of 1.9 million barrels in crude inventories, a drop of 900,000 barrels in the gasoline supply and a decline of 1.2 million barrels in distillate inventories.

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Before the EIA report, West Texas Intermediate (WTI) crude was trading down about 1.7% at around $86.50 a barrel, more than a dollar below Tuesday’s closing price of $87.98. The WTI price fell further to around $86.20 shortly after the report was released.

For the past week, crude imports averaged more than 7.7 million barrels a day, up about 428,000 barrels a day compared with the previous week. Refineries were running at 89.3% of capacity, with daily input of about 15.6 million barrels a day, about 355,000 barrels a day below the previous week’s average.

WTI crude prices have tumbled more than $3 a barrel since last week. Refinery throughput has dropped for a second straight week. Pump prices continue to fall as consumer demand weakens.

According to AAA, the current national average pump price per gallon of regular gasoline is $3.267, down from $3.333 a week ago and from $3.438 a month ago. Last year a gallon of regular cost $3.349 on average in the United States.

Here is a look at how share prices at three U.S. producers are reacted to this latest report.

Exxon Mobil Corp. (NYSE: XOM) traded down about 0.9%, at $92.59 in a 52-week range of $84.79 to $104.76.

Chevron Corp. (NYSE: CVX) traded down about 0.6%, at $115.33 in a 52-week range of $109.27 to $135.10.

Continental Resources Inc. (NYSE: CLR) traded down about 1.8% to $60.73. The stock’s 52-week range is $50.13 to $80.91. Continental is the largest producer in the Bakken shale play.

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