US: EIA Petroleum Status Report

Thu Oct 12 10:00:00 CDT 2017

Actual Previous
Crude oil inventories (weekly change) -2.7M barrels -6.0M barrels
Gasoline (weekly change) 2.5M barrels 1.6M barrels
Distillates (weekly change) -1.5M barrels -2.6M barrels

Crude oil inventories fell 2.7 million barrels in the October 6 week to 462.2 million, 2.5 percent below the level a year ago. Product inventories were mixed, with gasoline up 2.5 million barrels to 221.4 million, 1.8 percent below the year ago level, while stocks of distillates fell 1.5 million barrels to 134.0 million, down 14.7 percent year-on-year. The decline in crude oil inventories reported by the EIA came as a surprise following Wednesday's weekly report of a 3.1 million barrel increase by the American Petroleum Institute, a private industry group. WTI prices jumped up about 30 cents to around $50.50 per barrel immediately following the release of the EIA report.

Refineries operated at 89.2 percent of their operable capacity in the week, up 1.1 percentage points from the prior week. Daily gasoline production increased by 100,000 barrels to an average of 10 million barrels, but the production of distillates remained unchanged at 4.9 million barrels per day.

Average daily crude imports rose 403,000 barrels to 7.6 million, pulling up the 4-week average to 7.4 million barrels per day, 6.6 percent below last year at this time.

The demand side was steady, with total products supplied over the last four weeks averaging 20.2 million barrels per day, up 1.3 percent year-on-year. Motor gasoline supplied during the period averaged 9.4 million barrels per day, up 1.3 percent from the level a year ago, while distillate fuel product supplied averaged 3.9 million barrels, up 2.1 percent from the same period 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.