The US Energy Information Administration said in its report published on Wednesday that commercial crude oil inventories in the United States, excluding the Strategic Petroleum Reserve, fell by 3.7 million barrels in the week ended August 2. At the same time, crude oil refinery inputs averaged 16.4 million barrels per day during the same week, an increase of 252,000 barrels per day compared to the previous week’s average. Refiners operated at 90.5% of their operating capacity last week. Gasoline production increased last week, averaging 10.0 million barrels per day. Crude oil imports were 1.2 million barrels per day.
While oil prices rose strongly overnight following the large decline witnessed by the Bank of Japan, which outweighed the overall inventory increase reported by the American Petroleum Institute. In addition, traders are closely monitoring geopolitical risks, but for the time being, tactical trading will rely on official inventory data. It measures the change in the number of barrels of crude oil held in storage by commercial companies during the past week;
US Crude Oil Inventories: This is the primary measure of the supply-demand imbalance in the market, which can lead to changes in production levels and price volatility; while this is a US indicator, it has a significant impact on the Canadian dollar due to Canada’s large energy sector;
US crude oil imports averaged 6.9 million barrels per day last week, down 166,000 barrels per day from the previous week. Over the past four weeks, crude oil imports have averaged about 6.8 million barrels per day, up 2.9% from the same period in the previous four weeks last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 778,000 barrels per day last week, and distillate fuel imports averaged 112,000 barrels per day.
Weekly Petroleum Finished Petroleum
US crude oil refinery inputs averaged 16.4 million barrels per day during the week ending July 19, 2024, down 521,000 barrels per day from the previous week’s average. Refiners ran at 91.6% of capacity last week. Gasoline production rose last week, averaging 10.2 million barrels per day. Distillate fuel production fell last week, averaging 4.9 million barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 3.7 million barrels from the previous week. At 436.5 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year. Total gasoline inventories fell by 5.6 million barrels from the previous week and are about 2% below the five-year average for this time of year.
Finished gasoline and blending component inventories fell last week. Distillate fuel inventories fell by 2.8 million barrels last week and are about 9% below the five-year average for this time of year. Propane/propylene inventories increased by 1.8 million barrels from the previous week and are 15% above the five-year average for this time of year. Total commercial petroleum inventories fell by 4.6 million barrels last week.
Total products delivered over the past four weeks averaged 20.6 million barrels per day, up 0.4% from the same period last year. Gasoline products delivered over the past four weeks averaged 9.3 million barrels per day, up 2.5% from the same period last year. Distillate fuel products delivered averaged 3.7 million barrels per day over the past four weeks, up 3.2% from the same period last year. Jet fuel products delivered increased 3.8% from the same period last year.
The Impact of Inventory Changes on Oil Prices
Crude oil inventory data, such as those released by the U.S. Energy Information Administration, is an important market indicator. When there is an unexpected increase in oil inventories, it indicates an oversupply, which can lead to lower oil prices. Conversely, a decrease in inventories can lead to higher oil prices.
The relationship between oil prices and the U.S. dollar: Oil prices and supply options have a significant impact on the value of the U.S. dollar. Since oil is often priced in U.S. dollars, changes in oil prices can affect the demand for the dollar. For example:
Inventory increases: When inventories rise and oil prices fall, oil-exporting countries may see a decrease in their oil export revenues. This can weaken demand for the dollar, because oil-exporting countries need to sell U.S. dollars to finance their imports.
Inventory decreases: If inventories fall and oil prices rise, there may be stronger demand for the dollar. Oil-importing countries will need to buy U.S. dollars to finance their purchases, which strengthens the value of the dollar.
Inventory impact on financial markets: Oil price movements can also affect financial markets. Changes in oil prices affect stock and bond markets, which can have an indirect impact on the dollar:
Stock Markets: Lower oil prices can weaken oil companies and negatively impact stock markets. Conversely, lower oil prices can stimulate the overall economy, which can lead to greater demand for the dollar.
Bond Markets: Changes in oil prices can affect government bond yields. For example, higher oil prices can lead to higher inflation expectations, which can lead to higher bond yields and strengthen the value of the dollar.
Next Release August 14, 2024: Although this is a US indicator, it has a significant impact on the Canadian dollar due to Canada’s large energy sector
