US: EIA Petroleum Status Report

Wed Mar 25 09:30:00 CDT 2015

Actual Previous
Crude oil inventories (weekly change) 8.2M barrels 9.6M barrels
Gasoline (weekly change) -2.0M barrels -4.5M barrels
Distillates (weekly change) 0.0M barrels 0.4M barrels

Oil inventories continue to build and in dramatic fashion, up 8.2 million barrels in the March 20 week for an 11th straight build, all of them large. Oil inventories stand at 466.7 million barrels which is yet another 80 year high for the data. Refineries cut back production in the week, contributing to a 2.0 million barrel draw in gasoline inventories and no change for distillate inventories. In a positive sign, wholesale supplies are now less bloated, up only very slightly for gasoline and up only moderately for distillates. WTI is down about 50 cents to $47.75 in early reaction to the data.

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.