The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories decreased by 2.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 519.5 million barrels. The commercial crude inventory remains at historically high levels for this time of year, according to the EIA.

Wednesday morning, the International Energy Agency (IEA) issued its monthly Oil Market Report. The agency said that “little has changed [month over month] with the market showing an extraordinary transformation from a major surplus in 1Q16 to near-balance in 2Q16.” The IEA noted that commercial inventories rose by 13.5 million barrels in May to close the month at a record global total of 3.07 billion barrels.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 2.3 million barrels in the week ending July 15. API also reported gasoline supplies increased by 800,000 barrels and distillate supplies fell by 500,000 barrels. For the same period, analysts had estimated a decrease of around 1.7 million barrels in crude inventories along with a decline of 100,000 barrels in gasoline supplies and a 700,000-barrel increase in distillates.

Total gasoline inventories increased by 900,000 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 9.7 million barrels a day for the past four weeks, up by 1.3% compared with the same period a year ago.

The U.S. rig count has risen for three consecutive weeks, and there are now 41 more rigs operating than at the end of May. This may not be the best news we could be getting.

Rig counts began rising when oil was trading at around $50 a barrel in June. It now trades at around $45 a barrel, and inventories of refined products remain well above the five-year average range. RBN Energy notes that this is not an issue only in the United States, but in Europe and Asia as well.

Reuters reported Monday that at least one crude oil tanker is anchored off the British coast waiting for a buyer. The report noted:

The resurgence of floating storage, full tanks on land and the wilting demand growth underscore the difficulty crude oil will face to find any sustained price recovery in the near term, even as crude production itself tapers off.

U.S. gasoline supplies increased again last week. Crude prices are almost certain to stall as refinery demand drops. The United States is about halfway through the summer driving season with near-record inventories of gasoline. Any idea that this glut will ease enough to raise crude prices is very likely wishful thinking.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for August delivery traded down about 0.9% at around $44.16 a barrel and bounced to around $44.36 shortly after the report’s release. WTI crude settled at $44.65 on Tuesday. The 52-week range on August futures is $32.22 to $55.00.

Distillate inventories decreased by 200,000 barrels last week and also remain well above the upper limit of the average range for this time of year. Distillate product supplied averaged about 3.8 million barrels a day over the past four weeks, down by 0.7% when compared with the same period last year. Distillate production averaged about 5 million barrels a day last week, roughly flat compared with the prior week.

For the past week, crude imports averaged over 8.1 million barrels a day, up by about 293,000 barrels a day compared with the previous week. Refineries were running at 93.2% of capacity, with daily input averaging about 16.9 million barrels, about 319,000 barrels a day more than the previous week’s average.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.194, down from $2.217 a week ago and down about 14 cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.756 on average in the United States.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

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 down 0.2%, at $94.29 in a 52-week range of $66.55 to $95.55. Over the past 12 months, Exxon stock has traded up about 15.6% and is down about 8.4% since August 2014, as of Tuesday’s close.

Chevron Corp. (NYSE: CVX) traded down about 0.6%, at $105.46 in a 52-week range of $69.58 to $107.58. As of Tuesday’s close, Chevron shares have added about 14.1% over the past 12 months and trade down about 20.6% since August 2014.

The United States Oil ETF (NYSEMKT: USO) traded down about 0.3%, at $10.67 in a 52-week range of $7.67 to $17.08.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded down about 0.8% to $28.99, in a 52-week range of $20.46 to $32.78.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.