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Crude Oil Price Sinking on Large Increase to Inventory
By: 24/7 Wall St. | November 7, 2018

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning showing that U.S. commercial crude inventories increased by 5.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 431.8 million barrels. The commercial crude inventory is now about 3% higher than the five-year average for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories increased by about 7.83 million barrels in the week ending November 2. Gasoline inventories decreased by 1.2 million barrels, and distillate stockpiles dropped by about 3.64 million barrels. For the same period, analysts expected crude inventories to increase by about 2.1 million barrels. Gasoline inventories were seen down about 2.6 million barrels, and distillate inventories were also expected to fall by about 2.8 million barrels.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for December delivery traded up about 0.2% at around $62.35 a barrel, and it traded at $62.27 shortly after the report’s release. WTI for December delivery opened at $61.73 Wednesday morning, down about 0.8% from Tuesday’s settlement price of $62.21. The 52-week range on December futures is $53.79 to $76.72.

The energy industry mostly came through the midterm elections unscathed. In fact, you could say it dodged a couple of bullets. First, a Colorado initiative that would have increased the setback for any new oil and gas drilling from 500 to 2,500 feet from a dwelling. Despite claims that drilling and fracking are adversely affecting public health, about 57% of the state’s voters rejected the enlarged setbacks. According to Ballotpedia, supporters of the initiative raised and spent about $1.19 million while opponents spend $30.28 million.

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