US: EIA Petroleum Status Report

Wed Dec 16 09:30:00 CST 2015

Actual Previous
Crude oil inventories (weekly change) 4.8M barrels -3.6M barrels
Gasoline (weekly change) 1.7M barrels 0.8M barrels
Distillates (weekly change) 2.6M barrels 5.0M barrels

Builds sweep weekly petroleum inventory data led by a heavy 4.8 million barrel build for oil in the December 11 week and builds of 1.7 million barrels for gasoline and, in a reflection of the nation's unusually warm weather, another large build for distillates, up 2.6 million barrels. The build in oil partly reflects lower demand from refineries which sharply cut distillate production in the week. The build also reflects another increase in oil imports which at 7.9 million barrels in the week are, on a four-week basis, up 6.3 percent from a year ago. Domestic production rose slightly in the week to 9.2 million barrels but is only fractionally higher on the year. End-user demand indications in this report are very soft and point to the risk of further builds ahead with gasoline up only 0.7 percent year-on-year and distillates down a very steep 8.2 percent. WTI, moving toward $36, is down about 50 cents in early reaction to 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.