Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Are The Big U.S. Crude Oil Draws Over For Now?

By Investing.com (Barani Krishnan/Investing.com)CommoditiesSep 25, 2019 09:09
uk.investing.com/analysis/are-the-big-us-crude-oil-draws-over-for-now-200432950
Are The Big U.S. Crude Oil Draws Over For Now?
By Investing.com (Barani Krishnan/Investing.com)   |  Sep 25, 2019 09:09
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

History is a good predictor of the future, so goes the saying.

And few things might prove that better than backdated U.S. crude inventories, where an extraordinary narrative of chronologically identical draws could be playing out.

Ever since the peak U.S. summer driving season closed out in late August, market participants have wondered how long it would be before the inventory draws that have continued week after week would run out.

The answer it they might already be over, if historical information from the Energy Information Administration (EIA) is to be believed.

Same Trends Last Year And This Year

Large crude draws are common during the mid-cycle of a summer driving season, and they normally begin thinning out as August comes to an end. Blockbuster draws rarely occur after Labor Day, which typically falls in the first week of September, unofficially marking the end of the summer driving season.

U.S. Crude Inventories - 2018
U.S. Crude Inventories - 2018

Last year, though, was phenomenally different for U.S. crude draws. In the week ended Aug. 17 (reported by the EIA on Aug. 22), there was a crude draw of 5.8 million barrels. Then in the following three weeks to Sept. 7 (reported on Sept .12 by the EIA), U.S. stockpiles continued to see large declines. The cumulative draw over the four weeks was of 18 million barrels.

This year, the same pattern occurred, though the draws were even larger.

U.S. Crude Inventories - 2019
U.S. Crude Inventories - 2019

In the week to Aug. 18 (reported on Aug. 21 by the EIA), there was a crude draw of 2.7 million barrels. Then over the three weeks to Sept. 6 (reported by the EIA on Sept. 11), there were consecutive inventory drops. The four-week tally was 24.4 million barrels.

Since then, there has only been one EIA dataset, showing a build 1.06 million barrels for the week ended Sept. 13.

U.S. Crude Stockpiles Could Start Ticking Up From Here

Unless the EIA’s next numbers for the week ended Sept. 20, due at 10:30 AM ET (14:30 GMT) on Wednesday, show a draw, it could mean stockpiles will be creeping up from here.

Some analysts say they won’t be surprised if the EIA reports another rise in crude stocks after the heavy rainfall in Texas last week that hit refinery activity. Exxon Mobil (NYSE:XOM), for instance, closed its 370,000 barrels-per-day refinery in the Texas city of Beaumont on Thursday due to flooding.

A preliminary inventory snapshot from the American Petroleum Institute (API) on Tuesday suggested that the EIA could report a sharp rise in stockpiles for the week ended Sept 20.

The API cited a crude build of 1.4 million barrels for the week, against a broader market consensus for a draw of 250,000 barrels.

In the previous week to Sept. 13, the API suggested a crude build of 592,000 barrels and the EIA ultimately reported a rise of 1.06 million.

When comparing the API and EIA data, the directional trend is often what matters, as absolute numbers reported by the two entities vary dynamically because they are measured differently. The API collects industry data reported voluntarily by its members. The EIA is a government agency that mandates reporting by the entire U.S. energy sector.

While the sure way of knowing the inventory numbers for each week will be to wait out the EIA release, a surprisingly accurate read might be obtained by just parsing its historical data.

Are The Big U.S. Crude Oil Draws Over For Now?
 

Related Articles

Are The Big U.S. Crude Oil Draws Over For Now?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email