The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, one day later than usual due to the New Year’s Day holiday. U.S. commercial crude inventories decreased by 7.1 million barrels last week, maintaining a total U.S. commercial crude inventory of 479 million barrels. The commercial crude inventory remains near the upper limit of the average range for this time of year.

Wednesday evening, the American Petroleum Institute (API) reported that crude inventories fell by 7.4 million barrels in the week ending December 30. API also reported gasoline supplies increased by 4.3 million barrels and distillate inventories jumped by 5.2 million barrels. For the same period, analysts had estimated a decrease of 2.2 million barrels in crude inventories, a rise of 1.8 million barrels in gasoline stockpiles and an increase of 1.1 million barrels in distillates.

Total gasoline inventories increased by 8.3 million barrels last week, according to the EIA, and are now near the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged 9 million barrels a day for the past four weeks, down by 0.2% compared with the same period a year ago.

With the new year just a few days old, and with it the promised crude oil production cuts, the price of benchmark West Texas Intermediate (WTI) reached a peak of $55.44 on Tuesday before dropping to just over $52 on Wednesday. The quick change in direction has now settled about halfway between the two extremes, which is about where it was on the last trading day of 2016.

Most analysts appear to believe that OPEC and other crude-producing nations will stick by their promise to cut around 1.8 million barrels for the world’s daily production. A glance at the price curve shows September 2017 futures at $57.45 a barrel and January 2018 futures at $57.36.

The lower futures price marks a shift from price contango to backwardation, where prices in the future exceed current spot prices. A backwardated market can speed up a return to balance in an oversupplied physical market by encouraging a significant drawdown of built-up stockpiles.

The impact on high-cost producers is that it makes hedging future production ineffective. Goldman Sachs analyst Damien Courvalin told Bloomberg News:

[N]ormalization of inventories is key to low-cost producers [because] it generates backwardation, which removes hedging gains from high-cost producers and helps low-cost producers grow market share [and] reduces oil price volatility, which increases the valuation of the debt and equity they are issuing.

Low-cost producers, in this case, means Saudi Arabia, Kuwait and, maybe, Russia. High-cost producers means U.S. shale drillers.

Before the EIA report, WTI crude for February delivery traded up about 1.1% at around $53.90 a barrel and slipped to $53.25 after the report’s release. WTI crude settled at $53.26 on Wednesday. The 52-week range on February futures is $35.10 to $55.44.

Distillate inventories increased by 10.1 million barrels last week and are now above the upper limit of the average range for this time of year. Distillate product supplied averaged over 3.8 million barrels a day over the past four weeks, up 8.1% compared with the same period last year. Distillate production averaged over 5.3 million barrels a day last week, up about 300,000 barrels compared with the prior week’s production.

The big build in gasoline and distillate inventories pushed the price down after Thursday’s report. Refineries are running at a high rate and exports of refined products are about 1.1 million barrels a day above last year’s total and the four-week export average is about a third higher than a year ago.

For the past week, crude imports averaged about 7.2 million barrels a day, down by about 984,000 barrels a day compared with the previous week. Refineries were running at 92% of capacity, with daily input averaging about 16.7 million barrels, about 132,000 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 $2.359, up from $2.303 a week ago and up more than 17 cents compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $1.993 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 down about 0.5%, at $90.46 in a 52-week range of $71.55 to $95.55. Over the past 12 months, Exxon stock has traded up about 15% and is down about 12.9% since August 2014, as of Wednesday’s close.

Chevron Corp. (NYSE: CVX) traded down about 0.2%, at $117.55 in a 52-week range of $75.33 to $119.00. As of last night’s close, Chevron shares have added about 31.5% over the past 12 months and also trade down about 11.8% since August 2014.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.3%, at $11.61 in a 52-week range of $7.67 to $12.45.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded up 0.7% to $34.72, in a 52-week range of $20.46 to $36.35.

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