|Crude oil inventories (weekly change)||2.3M barrels||9.4M barrels|
|Gasoline (weekly change)||-2.5M barrels||-4.6M barrels|
|Distillates (weekly change)||-1.1M barrels||0.9M barrels|
Crude oil inventories rose by 2.3 million barrels to yet another record high of 534.8 million in the March 25 week, but product inventories fell, though still remaining well above average, with gasoline down 2.5 million barrels and distillates down 1.1 million. Although refineries were operating at 90.4 percent capacity, gasoline production decreased last week, averaging 9.4 million barrels per day. Distillates production rose, however, averaging 4.9 million barrels per day. The four-week average of total products supplied is 19.5 million barrels per day, 2.2 percent higher than the same period last year, with a strong 5 percent year-on-year rise in the 4-week average gasoline supply partly offset by a 3.4 percent decline in distillates supply during the same period. WTI spiked up 50 cents to $39.80 immediately after the EIA release, but soon fell back again to trade below pre-release levels.
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.
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