|Crude oil inventories (weekly change)||7.7M barrels||4.9M barrels|
|Gasoline (weekly change)||0.5M barrels||2.0M barrels|
|Distillates (weekly change)||-3.8M barrels||-3.3M barrels|
The glut of oil and gasoline keeps building. Oil inventories rose sharply for a 6th straight week in the February 13 week, up 7.7 million barrels to a 4th straight 80-year high of 425.6 million barrels. Gasoline inventories rose 0.5 million barrels and are above the upper limit of their average range. Despite the glut, which includes wholesale supplies where gasoline is up a heavy 3.5 percent, refineries increased gasoline production in the week. But refineries did ease up on distillate production helping to make for a 3.8 million barrel draw in distillate inventories. Big builds for inventories should be a negative for the price of oil which however is up about 50 cents to $50.75 for WTI in choppy initial reaction to the 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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