|Crude oil inventories (weekly change)||-3.1M barrels||-1.8M barrels|
|Gasoline (weekly change)||8.1M barrels||3.0M barrels|
|Distillates (weekly change)||11.2M barrels||1.9M barrels|
Unusually large product builds headline the weekly petroleum status report that otherwise shows a 3.1 million barrel draw in oil inventories to 382.4 million for the January 2 week. In contrast, gasoline inventories increased by 8.1 million barrels with distillate inventories up by 11.2 million. Products supplied to the wholesale sector over the last 4 weeks have been very heavy with gasoline up a year-on-year 5.5 percent and distillates up 7.2 percent. The levels of product inventories point ahead to decreasing refinery production and easing demand for oil. WTI is down nearly $1 to $47.75 in initial reaction to today's report.
The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products.
Petroleum product prices are determined by supply and demand - just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices - or price increases for a wide variety of petroleum products such as gasoline or heating oil. If inventories are high and rising in a period of strong demand, prices may not need to increase at all, or as much. During a period of sluggish economic activity, demand for crude oil may not be as strong. If inventories are rising, this may push down oil prices.
Crude oil is an important commodity in the global market. Prices fluctuate depending on supply and demand conditions in the world. Since oil is such an important part of the economy, it can also help determine the direction of inflation. In the U.S., consumer prices have moderated whenever oil prices have fallen, but have accelerated when oil prices have risen.
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