US: EIA Petroleum Status Report

Wed Feb 07 09:30:00 CST 2018

Actual Previous
Crude oil inventories (weekly change) 1.9M barrels 6.8M barrels
Gasoline (weekly change) 3.4M barrels -2.0M barrels
Distillates (weekly change) 3.9M barrels -1.9M barrels

Crude oil inventories were up 1.9 million barrels in the February 2 week to 420.3 million, the second weekly increase in a row after 11 weeks of consecutive drawdowns, putting the year-on-year decline at 17.4 percent. Product inventories also increased, with gasoline up 3.4 million barrels to 245.5 million, 4.2 percent below the year ago level, and distillates up 3.9 million barrels to 141.8 million, 16.9 percent less than last year. The EIA's report of a crude oil build contrasted with a 1.1 million barrel drawdown reported Tuesday by the American Petroleum Institute (API), a private industry group. WTI prices, which moved higher in earlier trade after the bullish API report, fell sharply following the release of the inventory builds reported by the EIA, dropping more than a dollar to around $62.40 per barrel.

Refineries revved up operations in the week to operate at 92.5 percent of their operable capacity, up 4.4 percentage points from the prior week. Gasoline production rose sharply by 0.5 million barrels per day to an average of 10.1 million, while the production of distillates increased by the same amount to 5.1 million per barrels per day.

Crude oil imports fell by 538,000 barrels per day to an average of 7.9 million barrels per day during the week. The decline put average crude oil imports over the last four weeks at 8.1 million barrels per day, 4.5 percent less than in the same period last year.

Demand remained steady though year-on-year comparisons weakened during the week, with total products supplied averaging 20.8 million barrels per day, up by 4.8 percent from the same period last year. Of this amount, gasoline supplied averaged 8.9 million barrels per day, up 6.5 percent from a year ago, while distillates supplied averaged 4.2 million barrels per day, up 8.9 percent.

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.