|Crude oil inventories (weekly change)||8.9M barrels||10.1M barrels|
|Gasoline (weekly change)||-2.6M barrels||0.6M barrels|
|Distillates (weekly change)||-3.9M barrels||-3.3M barrels|
Refineries continue to slow down production, in turn contributing to large builds for oil inventories and large draws for gasoline and distillate inventories. Oil inventories rose sharply for a 3rd straight week, up 8.9 million barrels in the January 23 week to 406.7 million barrels. This is the highest level of commercial oil inventories in 80 years!
Gasoline inventories fell 2.6 million barrels in the week while distillate inventories fell 3.9 million. And judging by wholesale supplies, which are still very heavy, further refinery cutbacks and further product draws are likely in the weeks ahead. Wholesale supplies of gasoline are up a very steep 8.0 percent year-on-year while distillate supplies are up 5.6 percent.
For the balance of supply and demand, the product draws are a partial offset to the big build in oil. WTI is firming slightly to $45 in early 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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