US: EIA Petroleum Status Report

Wed Jul 29 09:30:00 CDT 2015

Actual Previous
Crude oil inventories (weekly change) -4.2M barrels 2.5M barrels
Gasoline (weekly change) -0.4M barrels -1.7M barrels
Distillates (weekly change) 2.6M barrels 0.2M barrels

A drop in oil imports contributed to a large 4.2 million barrel draw in oil inventories during the July 24 week to 459.7 million barrels. Production of gasoline and distillates is very busy with refineries operating at 95.1 percent. End-user demand for gasoline is particularly strong, up 6.2 percent in this report's measure which is unusually high for this reading. The price of oil is spiking following the news, up nearly $1 in early reaction to $48.50 for WTI.

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.