US: EIA Petroleum Status Report

Wed Oct 04 09:30:00 CDT 2017

Actual Previous
Crude oil inventories (weekly change) -6.0M barrels -1.8M barrels
Gasoline (weekly change) 1.6M barrels 1.1M barrels
Distillates (weekly change) -2.6M barrels -0.8M barrels

Crude oil inventories fell by a larger-than-expected 6.0 million barrels in the September 29 week to 465.0 million, 0.9 percent below the level a year ago. Product inventories were mixed, with gasoline up 1.6 million barrels to 218.9 million, 3.7 percent below last year at this time, while distillates stocks fell 2.6 million barrels to 135.4 million, 15.7 percent below last year's level. A decline in crude inventories was anticipated, as refineries gradually coming back into operation after being shut down due to Hurricane Harvey deplete accumulated unrefined crude oil, but it exceeded the weekly drawdown of 4.1 million barrels reported Tuesday to subscribers by the American Petroleum Institute, a private investor group. WTI prices rose about 40 cents to around $50.60 per barrel immediately following today's EIA report.

Refineries operated at 88.1 percent of their operable capacity in the week, down 0.5 percentage points after jumping by a total of over 10 percentage points in the prior two weeks. Gasoline production was unchanged, averaging about 9.9 million barrels per day, while the production of distillates rose to 4.9 million barrels per day.

Daily crude oil imports fell by 213,000 barrels to an average of 7.2 million, taking the 4-week average to 7.1 million barrels per day, 10.7 percent below the level during the same period last year.

The demand side was steady, with total products supplied over the last four weeks averaging 20.2 million barrels per day, up by 1.9 percent from last year at this time. Motor gasoline supplied averaged 9.5 million barrels per day, up 1.3 percent year-on-year, while distillates supplied averaged 4.0 million barrels, up a sharp 12.0 percent from last year.

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.