U.S. Crude Oil Production Increases, Inventories Decline
For the week ending May 22, 2015, U.S. crude oil refinery inputs averaged about 16.5 million barrels per day. This was 237,000 barrels per day more than the previous week’s average. Refineries operated at 93.6% of their operable capacity last week. (Source: U.S Energy Information Administration, May 28, 2015.)
For the same period, U.S. crude oil inventories decreased by 2.8 million barrels from the previous week. The inventories rose to 479.4 million barrels and currently stand at the highest level for this time of year in at least 80 years.
As of noon on May 28, 2015, West Texas Intermediate (WTI) crude was trading at $57.34 a barrel; slightly lower than the close of the previous day at $57.62 a barrel.
There are few developments on the production side; U.S. drillers cut just one rig last week, bringing the number of rigs operating in U.S. oilfields to 659, compared to 1,528 a year ago. Though it was the 24th straight week of a decline, it was the slowest pace seen since the crash of oil prices. (Source: Bakerhughes.com , last accessed May 28, 2015.)
According to Baker Hughes, U.S. drillers just cut one rig last week (the week ending May 22). It was the slowest pace seen since the summer of last year. The number of rigs active in service as of Monday, May 25, was 659—down by nearly 67% from last year.
In addition to all of this, the Organization of Petroleum Exporting Countries (OPEC) will meet next week. The organization is not expected to cut its production at the meeting. Saudi Arabia’s Al Hayat newspaper quoted an unnamed OPEC source as saying that the meeting will be a short one. (Source: Reuters, May 28, 2015.)
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.