US: EIA Petroleum Status Report

Thu Oct 15 10:00:00 CDT 2015

Actual Previous
Crude oil inventories (weekly change) 7.6M barrels 3.1M barrels
Distillates (weekly change) -1.5M barrels -2.5M barrels
Gasoline (weekly change) -2.6M barrels 1.9M barrels

Oil stocks rose a sharp 7.6 million barrels in the October 9 week to 468.6 million barrels. A drop in refinery demand for oil together with a rise in oil imports contributed to the build. Refineries operated at only 86.0 percent of capacity in the week which is low for this reading. Gasoline inventories fell 2.6 million barrels and distillate inventories fell 1.5 million in the week. But refineries may have to pick up production based on final demand measures which look strong with gasoline up a year-on-year 3.4 percent and distillates up 5.4 percent. Despite the large headline build for oil, WTI is little changed in initial reaction, holding near $45.75.

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.