E Gasoline Inventories Increase, But We Continue To See Signs That The Oil Supply Glut Is Ending

Oil inventories in the United States continue to decline as the latest weekly status report by the Energy Information Administration shows its seventh straight week of declines. This continues the narrative that I have been presenting for the past few weeks that the previously oversupplied situation in the United States may be coming to an end.  However, the nation’s oil inventories still remain considerably above the levels that they had at the same time last year and motor gasoline inventories actually showed an increase over last week’s levels showing that the nation still has considerable surplus supply. Thus, there is little reason to believe that we will see oil return to its previous levels anytime soon.

At the end of the week ended June 12, 2015, the nation’s inventories of crude oil contained a total of 467.9 million barrels of crude oil. This represents a decline of 2.7 million barrels from the 470.6 million that these same inventories contained at the end of the week ended June 5, 2015. However, as already mentioned, these inventories still contain substantially more oil than they did last year.  At the end of the week ended June 13, 2014, the nation’s commercial inventories of crude oil contained a total of 386.3 million barrels of crude oil.

For the past several weeks, we had seen consistently declining levels in America’s motor gasoline inventories. However, that changed this week. At the end of the week ended June 12, 2015, the nation’s commercial inventories of motor gasoline contained 217.8 million barrels of gasoline in aggregate compared to 217.4 million barrels at the end of the previous week. Admittedly, this relatively small increase does not tell us particularly much. However, current inventory levels remain slightly above last year’s levels. At the end of the week ended June 13, 2014, the nation’s inventories of motor gasoline contained a total of 214.3 million barrels.

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Disclosure: I have various positions in oil-related stocks. I have several clients with positions in oil-related stocks.

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Kurt Benson 3 years ago Member's comment

Nicely done. This is why I'm bullish $OIL heading higher into 2016!