|Crude oil inventories (weekly change)||2.4M barrels||-4.9M barrels|
|Gasoline (weekly change)||-1.8M barrels||0.7M barrels|
|Distillates (weekly change)||0.4M barrels||1.8M barrels|
After a run of draws, oil inventories rose in the June 26 week, up 2.4 million barrels to 465.4 million in a build tied to a rise in imports. Refineries increased output in the week and are operating at a blistering 95.0 percent of capacity. Consumption indications in the report are very solid with gasoline up 6.4 percent year-on-year and distillates up 4.1 percent. Prices and capital investment may be down but the oil patch is still very active. Oil, near $58.75 for WTI, is down about 50 cents in reaction to the headline build.
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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