US: EIA Petroleum Status Report

Wed Dec 02 09:30:00 CST 2015

Actual Previous
Crude oil inventories (weekly change) 1.2M barrels 1.0M barrels
Gasoline (weekly change) 0.1M barrels 2.5M barrels
Distillates (weekly change) 3.1M barrels 1.0M barrels

The oil glut continues to build with inventories up 1.2 million barrels in the November 27 week to 489.4 million. Oil imports rose in the week as did domestic output of oil. Holding down the build was heavy demand from refineries which operated at a very strong 94.5 percent of capacity in the week. But pointing to lower refinery output ahead are indications on end-user demand which are soft with both gasoline and distillates down slightly from this time last year. WTI is slipping slightly in early reaction to the data and is testing support at $41.00.

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.