US: EIA Petroleum Status Report

Wed Mar 18 09:30:00 CDT 2015

Actual Previous
Crude oil inventories (weekly change) 9.6M barrels 4.5M barrels
Gasoline (weekly change) -4.5M barrels -0.2M barrels
Distillates (weekly change) 0.4M barrels 2.5M barrels

The shocking glut of oil keeps building, up a very steep 9.6 million barrels in the March 13 week to yet another 80-year high of 458.8 million barrels. This is the 10th straight build for oil -- and all of them large.

The build does not reflect easing demand from refineries which increased production in the week for both gasoline and distillates. Despite the increase, gasoline inventories fell 4.5 million barrels but remain well above their average upper limit. Distillate inventories fell 0.4 million barrels.

A look at the wholesale sector also shows heavy conditions with gasoline supplies up 2.7 percent year-on-year, which is heavy for this reading, and distillates up 5.6 percent. WTI oil is down about 25 cents following the data, near $42.25.

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.