US: EIA Petroleum Status Report

Wed Sep 20 09:30:00 CDT 2017

Actual Previous
Crude oil inventories (weekly change) 4.6M barrels 5.9M barrels
Gasoline (weekly change) -2.1M barrels -8.4M barrels
Distillates (weekly change) -5.7M barrels -3.2M barrels

Crude oil inventories rose 4.6 million barrels in the September 15 week to 472.8 million, 0.2 percent below the level a year ago. Product inventories declined, with gasoline down by 2.1 million barrels to 216.2 million, 4.0 percent below last year at this time, and distillates down 5.7 million barrels to 138.9 million, off 15.8 percent from the year ago level. As in the prior two weeks, crude oil inventory builds and product declines were a result of Hurricane Harvey, which prompted Texas oil companies in the affected area to temporary close down their refinery operations. WTI prices fell about 20 cents to around $50.40 per barrel immediately following the release of the EIA report.

Refineries operated at 83.2 percent of their operating capacity, a 5.5 percentage-point increase from the prior week reflecting the still incomplete rebooting of Texas oil refineries. But gasoline production decreased to an average of 9.8 million barrels per day, while distillate production did rise to average 4.5 million barrels per day, up 500,000 barrels per day from the prior week.

Daily crude oil imports increased to an average of 7.4 million barrels, up 888,000 barrels from the prior week. Imports over the last 4 weeks averaged 7.2 million barrels per day, 10.9 percent less than in the same period last year.

The demand side was steady, with total product supplied over the last 4 weeks averaging 20.4 million barrels per day, up 0.5 percent from last year. Motor gasoline supplied fell to an average of 9.5 million barrels per day, down 0.2 percent from the same period last year, while distillate supplied averaged 4.1 million barrels per day, up a sharp 14.5 percent from the year ago level.

Crude oil inventories and their product counterparts are likely to exchange roles in the coming weeks as refineries gradually fire up to full operation and refine the accumulated crude supplies away.

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.