Breaking News

US Crude Stocks Unexpectedly Fall

By ORBEXCommoditiesMar 14, 2019 10:48AM ET
US Crude Stocks Unexpectedly Fall
By ORBEX   |  Mar 14, 2019 10:48AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Crude oil prices were boosted this week in response to the latest industry data which showed a reduction in stockpiles. The weekly Energy Information Administration report showed that in the week ending March 8, US crude inventories fell by 3.9 million barrels. This was well below the expected increase of 2.7 million barrels which the market was looking for.

In terms of looking at the data on a regional basis, the heaviest declines were in the Gulf Coast. This saw a stockpile reduction of over 5 million barrels. Stockpiles in the East Coast and Midwest regions both saw increases while inventory at the Cushing delivery hub in Oklahoma decreased by nearly 700k barrels. This marked their first drawdown in a month.

US Crude Production Down

The data also showed that US crude imports remained steady over the week, rising by 2000 barrels per day. Crude production in the US actually posted a slight decline, falling by 100k barrels per day from the recent record high levels of 12 million barrels per day. Utilization rates rose 0.1% to 87.6% of capacity as refinery runs increased by 30k barrels per day.

Gasoline Stocks Down
Indeed, gasoline stockpiles also saw heavy reductions, falling 4.6 million barrels over the week. This was well below analyst expectations for a 2.5 million barrel drop. However, distillate stockpiles, which include diesel and heating oil, rose over the week by 383k barrels. This was in contrast to analyst expectations for a 1.9 million barrels drop.

Looking ahead, the fundamental backdrop seems to be supportive of higher oil prices. Refiners are starting to slow down operations coming out of maintenance. In addition, the weight of OPEC cuts as well as restrictions in Venezuelan supplies are starting to be properly felt. Therefore, we are likely to see higher prices going forward, despite still record high US production.

OPEC Cuts To Be Extended?

The current supply cuts undertaken by OPEC and a group of allied nations led by Russia, are scheduled to run for just six months. However, Russian news agencies have been reporting this week that Saudi Arabia, the largest OPEC producer, is planning to extend the cuts until year-end.

Venezuela Sanctions Impacting Market

Alongside the OPEC supply cuts, the absence of supply from Venezuela is also boosting the market. US sanctions, which are crippling the already broken economy, have seen a dramatic decrease in exports from the oil-rich nation. This is because suppliers are unable to fund the export operations.

Technical Perspective

Weekly Oil
Weekly Oil

Oil prices are fast approaching a key juncture at the retest of the broken bullish channel base. If price can break above structural resistance and back above the channel low, we could see the current rally turning into a resumption of the bullish move off 2015 lows.

However, if price fails at the retest of the broken bullish channel, we could start to see a reversal lower. We could see a continuation of the bearish move which started toward the end of last year. For now, the rally seems strong. However, there are plenty of overhead levels offering resistance, which could cause an issue for bulls.

US Crude Stocks Unexpectedly Fall
US Crude Stocks Unexpectedly Fall

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’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
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?
Replace the attached chart with a new chart ?
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'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

Continue with Google
Sign up with Email