UGA, USO

The US Energy Information Administration released its weekly Petroleum status report Wednesday morning.

US commercial Crude Oil inventories rose by 1.8-M bbs last week, bringing the total US commercial Crude Oil inventory to 374.8-M bbls, above the upper limit of the 5 yr range for this time of the year.

Total gasoline inventories rose by 2.9-M bbls last week and are now in the middle of the 5-yr average range. Total motor gasoline supplies averaged nearly 8.6-M BPD over the past 4 wks, a rise of 0.2% compared with the same period a year ago.

According to American Petroleum Institute reports, Crude Oil supplies fell by 27,000 bbls, while gasoline supplies rose by 1.4-M bbls for the week ended 2 November.

Platts is estimating a build of 1-M bbls in the Crude inventories and a drawdown of 1-B bbls in gasoline and 2-M bbls in distillates, including heating oil.

Crude prices, which had fallen to about $86.22 a barrel before the report was released, have fallen to around $85.90 a barrel following the EIA report and are down about 3.3% on the day so far.

For the past week, crude imports averaged 8 million barrels a day, an increase of about 89,000 barrels a day from the previous week. Refineries were running at 85.4% of capacity, with daily input of 14.7 million barrels a day, about 183,000 barrels a day less than the previous week.

Distillate inventories rose by 100,000 bbls last week and remain well below the lower limit of the average range. Distillate product supplies averaged more than 3.6-M BPD over the past 4 wks, down 15.3% when compared with the same period last year. Distillate production totaled nearly 4.6-M BPD last week, up by about 100,000 BPD from the prior week.

The rise in inventories is most likely due to the shutdown of 2 major refineries due to Superstorm Sandy.

The sharp rise in gasoline inventories is also due to the storm. The 1 area of concern about supplies is distillates, including heating oil, where the drop in production will drive up the cost of heating fuel primarily in the Northeast.

The United States Oil ETF NYSEMKT:USO is down more than 3% at 31.38, in a 52-wk range of 29.02 to 42.30.

The United States Gasoline ETF NYSEMKT:UGA is down about 3% at 54.72. The 52-wk range is 44.98 to 62.13.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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