US refiners in the Gulf Coast imported 26.4 MMbbls (million barrels) of crude oil in April 2015—compared to 20.5 MMbbls in March 2015 from Saudi Arabia, according to data from the U.S. Customs and Border Protection. This is the highest level of imports in the past year. The US imported 3.63 MMbpd (million barrels per day) of crude oil through waterways for the week ending May 1. The slowing US output means that crude oil imports will increase more. As a result, declining US supplies will support WTI (West Texas Intermediate) oil prices.

Bloomberg surveys show that OPEC’s (Organization of the Petroleum Exporting Countries) output was at 31.3 MMbpd in April 2015—compared to the quota of 30 MMbpd. OPEC has been producing more than the quota of 30 MMbpd for 11 months. Saudi Arabia and Iraq are OPEC’s top two producers. They continue to produce at peak levels.

The EIA (U.S. Energy Information Administration) reported that weekly stockpiles increased by 1.9 MMbbls (million barrels) to 490.9 MMbbls—from 489 MMbbls for week ending April 24. Bloomberg estimates showed that the stockpile would increase by 1.2 MMbbls last week. In contrast, inventories at Cushing, Oklahoma—the delivery hub for US futures—is expected to decline by 200,000 barrels for last week. The API (American Petroleum Institute) will release the crude oil inventory data today. Traders watching the EIA data also look for API data.

The fall in WTI oil prices impacts oil production and exploration companies like Continental Resources (CLR), Rosetta Resources (ROSE), and Oasis Petroleum (OAS). They account for 3.67% of the SPDR Oil and Gas ETF (XOP). Energy ETFs like the Energy Select Sector SPDR ETF (XLE) and XOP fell in yesterday’s trade. However, the S&P 500 increased marginally on May 4, 2015.

Source: Market Realist