US: EIA Petroleum Status Report

Wed Apr 27 09:30:00 CDT 2016

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Crude oil inventories (weekly change) 2.0M barrels 2.1M barrels
Gasoline (weekly change) 1.6M barrels -0.1M barrels
Distillates (weekly change) -1.7M barrels -3.6M barrels

Oil inventories continue to build, up 2.0 million barrels in the April 22 week to another record, at 540.6 million. Product inventories are mixed with gasoline up 1.6 million barrels and distillates down 1.7 million. Refinery demand, which fell in the week, contributed to the build in oil as production of both gasoline and distillates declined. Refineries, however, may be boosting gasoline output in coming weeks based at least on the report's demand indications where gasoline is up a year-on-year 5.6 percent which is very strong for this reading. WTI, near $44.25, is down about 50 cents in initial 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.