US: EIA Petroleum Status Report

Wed Mar 21 09:30:00 CDT 2018

Actual Previous
Crude oil inventories (weekly change) -2.6M barrels 5.0M barrels
Gasoline (weekly change) -1.7M barrels -6.3M barrels
Distillates (weekly change) -2.0M barrels -4.4M barrels

Crude oil inventories fell 2.6 million barrels in the March 16 week to 428.3 million, 19.7 percent below their level a year ago. Product inventories also declined, with gasoline down 1.7 million barrels to 243.1 million, 0.2 percent below last year at this time and distillates down 2.0 million barrels to 131.0 million, 15.7 percent lower than a year ago. Although the American Petroleum Institute, a private industry group, reported similar declines Tuesday in its report and crude oil prices had already risen in reaction, the first EIA drawdown in crude oil inventories in four weeks nevertheless lifted WTI prices by another 40 cents to around $64.60 per barrel immediately following the release of the EIA report.

Refineries operated at 91.7 percent of their operable capacity during the week, up 1.7 percentage points from the prior week. But gasoline production decreased by 400,000 barrels per day to an average of 9.9 million barrel per day, while the production of distillates increased slightly, averaging 4.5 million barrels per day.

Crude oil imports fell again and were down by 508,000 barrels per day from the prior week, averaging about 7.1 million barrels per day. The 4-week average remained at 7.5 million barrels per day, 4.8 percent less than in the same period last year.

Domestic crude oil production over the last four weeks averaged 10.4 million barrels per day, up a sharp 14.0 percent from the level a year ago.

Overall product demand increased from already strong levels, with total product supplied over the last four weeks averaging 20.5 million barrels per day, up 4.9 percent from the same period last year. But demand for the main product categories was mixed, with motor gasoline supplied rising slightly to an average of 9.3 million barrels per day, though the year-on-year gain shrank to 1.9 percent, while distillate product supplied fell to an average of 3.9 million barrels per day, down 4.5 percent from the level a year ago.

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.