U.S. Crude Oil Production Rises, Inventories Continue to Decline

U.S. Crude OilFor the week ending May 29, 2015, U.S. crude oil refinery inputs averaged 16.4 million barrels per day, 43,000 barrels per day less than the previous week’s average. In the week, refineries operated at 93.2% of their operable level. (Source: U.S Energy Information Administration , June 3, 2015.)

In the same report, the U.S. Energy and Information Administration (EIA) said the U.S. crude oil inventories decreased by 1.9 million barrels from the previous week. It was the fifth straight week of a decline. The inventories stand at 477.4 million barrels. U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.

Total products supplied over the last four-week period averaged over 19.9 million barrels per day, up by 4.3% from the same period last year.

Rigs Shutting Down

The U.S. rotary rig count from Baker Hughes was down 10, and dropped to 875 for the week of May 29, 2015. This is 991 rigs (53.1%) lower than last year. It was also the 25th straight week of a decline. (Source:Bakerhughes.com , last accessed June 3, 2015.)

As of Wednesday afternoon of June 3, 2015, West Texas Intermediate (WTI) crude was down nearly three percent and was trading at $59.67 a barrel.

Important Meeting Ahead

The Organization of Petroleum Exporting Countries (OPEC) is meeting on Friday, June 5.

“There is consensus among Gulf OPEC countries, and others, to keep the ceiling unchanged,” a senior Gulf OPEC delegate told Reuters late on Tuesday after an informal meeting of the four core Gulf Arab OPEC members earlier in the day. (Source: Reuters, June 3, 2015.)

The organization is expected to maintain its current levels of production, as it aims to keep its market share.

After their last meeting in January, crude prices fell to a six-year low of less than $42.00 a barrel, after which they recovered to around $60.00 a barrel.