|Crude oil inventories (weekly change)||2.5M barrels||-4.3M barrels|
|Gasoline (weekly change)||-1.7M barrels||0.1M barrels|
|Distillates (weekly change)||0.2M barrels||3.8M barrels|
The oil patch is very busy this summer. Oil inventories, driven by a gain in imports, rose 2.5 million barrels in the latest week to 463.9 million. Refineries, operating at 95.5 percent of capacity, are extremely active, reflecting very strong demand for gasoline which, based on this report's measure, is up 6.9 percent year-on-year which is unusually strong for this reading. Gasoline inventories, reflecting the strong demand, fell 1.7 million barrels in the week. Distillate inventories rose 0.2 million barrels. The price of oil, hovering right at $50 for WTI, is little changed immediately following 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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