US: EIA Petroleum Status Report

Wed Nov 25 09:30:00 CST 2015

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Crude oil inventories (weekly change) 1.0M barrels 0.3M barrels
Gasoline (weekly change) 2.5M barrels 1.0M barrels
Distillates (weekly change) 1.0M barrels -0.8M barrels

Oil inventories continue to build but the builds are slowing, at only 1.0 million barrels in the November 20 week that lifts total commercial inventories to a near record 488.2 million. Oil imports remain strong as does demand from refineries which operated at a very active 92.0 percent of capacity in the week.

Increased refinery output is making for product builds with gasoline up a sizable 2.5 million barrels in the week and distillates up 1.0 million. But demand indications, however, are suddenly looking soft, down a year-on-year 0.2 percent for gasoline and up only 2.1 percent for distillates in readings that hint at the risk of continued product and oil builds. WTI, near $42, is little changed in early reaction to the 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.