As is the case for most commodities, the price of crude oil can be influenced by several economic reports. In this article, we will explore some of the higher profile reports, including the EIA crude oil Stocks Change, the API statistics, and the Baker Hughes rig-count data.
The EIA (Energy Information Administration) crude oil Stocks Change (which is issued every Wednesday) is one of the most important data prints that can affect the price of oil. It is a weekly measure of the change in the number of barrels of crude oil stock and its derivatives stocked in the US. In FX, this report can have a strong impact on heavily commodity-influenced currencies such as the Canadian dollar.
Another crucial component of the EIA’s inventory data is the reading on the number of oil stocks at the Cushing, Oklahoma delivery hub. Inventory levels at Cushing reflect the pace at which the US oil supply moves from inland production areas to end refining markets. An inventory build-up indicates that more oil is being supplied than can be transported away for refining. West Texas Intermediate (WTI) crude oil prices, the major North American benchmark, are set in Cushing.
The API (American Petroleum Institute) Weekly crude oil Stock data, issued on Tuesday evenings, has become a little more popular recently but is generally less followed than official EIA data. You can think of it as a companion to the EIA’s inventory data. The American Petroleum Institute attempts to anticipate official EIA data and, as such, has validity.
The Baker Hughes rig-count has always correlated with crude oil prices, yet only recently have market participants started to watch it more closely. The Baker Hughes rig-count measures the number of active US rigs drilling for oil in each week. Unfortunately, the data is issued on Friday evenings, when liquidity is poor, and most market participants have already closed their books for the week. It can cause volatility, however, and the effects can be carried into the following week.