It was a case of now you see it and now you don’t for oil traders this week as the Energy Information Administration on Thursday reported that U.S. crude supplies declined by 4.8 million barrels for the week ended Aug. 30. Before this data was released, the American Petroleum Institute on Wednesday reported an increase of 401,000 barrels.
“API report has been proven to be a head-fake,” said Matt Smith, director of commodity research at ClipperData. “The EIA has reported a solid draw to crude stocks, with refining activity at a similar pace to last week, production dipping slightly, and exports holding above 3 million barrels per day for a second week—a hat-tip to Permian pipelines,”
Highlights from the report:
- U.S. crude oil refinery inputs averaged 17.4 million barrels per day during the week ending August 30, 2019, which was 27,000 barrels per day less than the previous week’s average. Refineries operated at 94.8% of their operable capacity last week. Gasoline production decreased last week, averaging 10.3 million barrels per day. Distillate fuel production decreased last week, averaging 5.2 million barrels per day.
- U.S. crude oil imports averaged 6.9 million barrels per day last week, up by 976,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.9 million barrels per day, 12.5% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 717,000 barrels per day, and distillate fuel imports averaged 126,000 barrels per day.
- U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.8 million barrels from the previous week. At 423.0 million barrels, U.S. crude oil inventories are at the five year average for this time of year.
Traders looking to make a play on oil can look to leveraged exchange-traded funds (ETFs). Whether they’re bullish or bearish on the commodity or the energy sector, traders have a plethora of options.
Oil bears can look to the Direxion Daily S&P Oil & Gas Exploration & Production Bear 3X ETF (DRIP) for inverse opportunities. For bulls looking to buy on the weakness can look to the United States 3x Oil (NYSEArca: USOU), ProShares UltraPro 3x Crude Oil ETF (NYSEArca: OILU) and the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares (NYSEArca: GUSH).
Two additional funds for traders to consider are the Direxion Daily Energy Bull 3X Shares (NYSEArca: ERX) for bullish plays and the Direxion Daily Energy Bear 3X Shares (ERY) for bearish opportunities to take advantage of.
For more market trends, visit ETF Trends.