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Crude Oil Stocks Set Record

Crude Oil Stocks Set Record

Crude oil inventories jumped to a new record last week, according to the Energy Information Administration (EIA), causing prices on the futures market to decline. Since the beginning of 2017, inventories have increased 10 out of 11 weeks.

Oil inventories in the U.S. rose 50 million barrels to 533,110 million barrels since the first week in January, according to EIA’s report issued on March 22. Crude oil inventories at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose 1.4 million barrels, the EIA said.

Prices on the New York Mercantile Exchange dropped to around $47 in response to the news.

Speculators attributed the rise in stock to an increase in U.S. oil production and a rise in oil imports. However, worldwide supplies appear to be smaller than they were a year ago, while demand is picking up. Production from OPEC members has declined since January. Demand in two key countries – China and India – increased in February.

Declining oil production and increased demand on the international markets appear to have softened the blow to crude oil prices in the U.S. Brent crude, which is traded in London, closed above $50 a barrel for the first time since November 30, closing at $50.64 per barrel on March 22. Refinery runs rose 329,000 barrels per day as utilization rates jumped 2.3 percentage points to 87.4% of capacity, led by higher runs at Gulf Coast and Midwest refiners. Gasoline stocks fell 2.8 million barrels, compared with analysts’ expectations for a 2 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 1.4 million-barrel drop, according to EIA data.

Alex Mills is President of the Texas Alliance of Energy Producers.  The opinions expressed are solely of the author.

Alex Mills became President of the Texas Alliance of Energy Producers in 2000, following the merger of the North Texas Oil & Gas Association (NTOGA) and the West Central Texas Oil & Gas Association (WeCTOGA). The Alliance is the largest state oil and gas associations in the nation with more than 3,000 members in 305 cities and 28 states.
Mills moved to Wichita Falls in 1994 as Executive Vice President of NTOGA, after living 8 years in Washington, D.C., where he served as Vice President of Marketing for the Independent Petroleum Association of America, the national organization for the independent oil and gas industry. He also served as Executive Vice President of the West Central Texas Oil & Gas Association in Abilene from 1981 to 1986.
He earned a Bachelor of Arts degree from the University of North Texas after serving in the U.S. Army Security Agency.
He worked as Managing Editor of The American Oil & Gas Reporter, and for several newspapers, television and radio stations in Texas. He authors a column concerning energy issues, which appears in the Fort Worth Business Press, San Angelo Standard Times, the Journal of North Texas, the Graham Leader, Wichita Falls Times Record News and the Midland Reporter Telegram.
Mills served as President of the University of North Texas Alumni Association in 1997 and 1998. Texas Governor Ann Richards appointed him to the Interstate Oil & Gas Compact Commission in 1994 and Governor George W. Bush re-appointed him in 1995. He serves on the Board of the National Stripper Well Association and IPAA’s Wildcatters’ Political Action Committee. He is a member of the American Society of Association Executives, the Texas Society of Association Executives, the Independent Petroleum Association of America, the Society of Petroleum Engineers, the Desk & Derrick Club, and he is a former high school football official.

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