US: EIA Petroleum Status Report

Wed Nov 22 09:30:00 CST 2017

Actual Previous
Crude oil inventories (weekly change) -1.9M barrels 1.9M barrels
Gasoline (weekly change) 0.0M barrels 0.9M barrels
Distillates (weekly change) 0.3M barrels -0.8M barrels

Crude oil inventories fell 1.9 million barrels in the November 17 week to 457.1 million, 6.5 percent below the level a year ago. Gasoline inventories remained unchanged on the week at 210.5 million barrels, 6.0 percent below last year's level, while distillates rose by 0.3 million barrels to 125.0 million, down 16.2 percent from last year. The week's decline in crude oil inventories removed exactly the amount built in the prior week but was much smaller than the 6.4 million barrel drop reported to subscribers by the American Petroleum Institute (API), a private industry group. WTI prices, which had earlier been driven to new highs for the year partly on the back of the API data, fell about 40 cents to around $57.30 per barrel immediately following the release of the EIA report.

Refineries nudged up operations by 0.3 percentage points during the week to 91.3 percent of their operable capacity. Gasoline production increased sharply by 500,000 barrels per day to an average of 10.4 million barrels per day. Distillate production also rose but only slightly to an average of 5.3 million barrels per day.

Crude oil imports fell marginally, averaging about 7.9 million barrels per day, down by 25,000 barrels per day from the prior week. The 4-week daily average for imports remained unchanged at 7.7 million barrels, but the year-on-year decline widened to 5.3 percent.

The demand side slightly eased though remaining strong and fractionally in positive year-on-year territory, with total product supplied over the last four weeks averaging 20.0 million barrels per day, up 0.1 percent from last year. Gasoline supplied averaged 9.4 million barrels per day, up 2.6 percent from the same period last year. Distillate product supplied averaged 4.0 million barrels per day, up 0.8 percent year-on-year.

The week's report continues to show a U.S. oil market that has emerged from oversupply and is gradually becoming tighter on the back of slightly stronger demand and smaller imports. However, current prices at 2-year highs are likely to stimulate new exploration and development activities, increasing domestic production and supply down the road.

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.