Crude Oil Price Slips as Inventory Report Shows Modest Gain

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 300,000 barrels last week, maintaining a total U.S. commercial crude inventory of 487.3 million barrels. The commercial crude inventory remains near levels not seen at this time of year in at least the past 80 years.

Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 482,000 barrels in the week ending November 13. For the same period, analysts had estimated an increase of 2 million barrels in crude inventories.

Total gasoline inventories increased by 1 million barrels last week, according to the EIA, and remain well above the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged over 9.2 million barrels a day for the past four weeks, up by 2% compared with the same period a year ago.

Benchmark West Texas Intermediate (WTI) crude for December delivery peaked at about $43.25 a barrel last week before sinking to just above $40 on Monday. The price has recovered to more than $41 since then, and WTI for January delivery, now the most heavily traded futures contract, trade at around $42.30 Wednesday morning, after hitting a peak at more than $44.50 last Thursday and dropping to a low of just over $41 on Monday.

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Nothing short of a dramatic drop in crude production is going to have much mid- or long-term impact on crude prices. A few hundred thousand barrels here and a few hundred thousand barrels there won’t make much difference, except in the very short term.

Before the EIA report, WTI for December delivery traded up about 1.5% at around $41.25 a barrel. The WTI price dipped to around $41.10 immediately following the report’s release, up about 1.2% on the day. The 52-week range on WTI futures is $39.22 to $77.69.

Distillate inventories decreased by 800,000 barrels last week and remain in the middle of the average range for this time of year. Distillate product supplied averaged about 4.1 million barrels a day over the past four weeks, up by 7.1% when compared with the same period last year. Distillate production averaged over 5 million barrels a day last week, up about 100,000 barrels per day compared with the prior week’s production.

For the past week, crude imports averaged about 7 million barrels a day, down by 409,000 barrels a day compared with the previous week. Refineries were running at 90.3% of capacity, with daily input of averaging 16.1 million barrels, about 137,000 barrels a day above the previous week’s average.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.13, down nearly 3.5% from $2.207 a week ago and from $2.262 a month ago. Last year at this time, a gallon of regular gasoline cost $2.875 on average in the United States.

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Here is a look at how share prices for two blue-chip stocks and two exchange traded funds reacted to this latest report.

Exxon Mobil Corp. (NYSE: XOM) traded up about 0.4%, at $80.33 in a 52-week range of $66.55 to $97.20. Year to date, Exxon stock traded down about 13% and is down about 17% since early November of 2014, as of Wednesday’s close.

Chevron Corp. (NYSE: CVX) traded up about 1.6%, at $92.47 in a 52-week range of $69.58 to $118.91. As of Tuesday’s close, Chevron shares have dropped about 18% year to date and trade down more than 23% since early November 2014.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.5%, at $13.07 in a 52-week range of $12.37 to $29.23.

The Market Vectors Oil Services ETF (NYSEMKT: OIH) traded up about 2.8% to $30.98, in a 52-week range of $26.00 to $45.20.