US: EIA Petroleum Status Report

Wed Jun 27 09:30:00 CDT 2018

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Crude oil inventories (weekly change) -9.9M barrels -5.9M barrels
Gasoline (weekly change) 1.2M barrels 3.3M barrels
Distillates (weekly change) 0.0M barrels 2.7M barrels

Crude oil inventories fell sharply by 9.9 million barrels in the June 22 week to 416.6 million, 18.2 percent below their level a year ago. Gasoline inventories rose 1.2 million barrels to 241.2 million, 0.1 percent above last year at this time, while distillates remained unchanged from the prior week at 117.4 million, 22.9 percent lower year-on-year. The exceptionally large draw in crude oil inventories slightly exceeded the 9.2 million decrease reported Tuesday by the American Petroleum Institute (API), a private industry group. WTI prices, which were lifted sharply higher on the back of the API data, rose by another 65 cents to around $72.55 per barrel immediately following the release of the EIA report.

Refineries ramped up to operate at 97.5 percent of their operable capacity, with gasoline production increasing, averaging about 10.1 million barrels per day, but the production of distillates falling to an average of 5.4 million barrels per day.

Crude oil imports rose by 114, 000 barrels per day in the week, averaging 8.4 million barrels per day. Over the last 4 weeks, crude oil imports averaged 8.3 million barrels per day, 2.4 percent more than in the same period last year.

Domestic crude oil production over the last 4 weeks averaged 10.9 million barrels per day, 16.8 percent more than last year at this time.

Overall product demand was roughly unchanged, with total product supplied over the last 4 weeks averaging 20.4 million barrels per day, 1.5 percent above the level in the same period a year ago. Demand for the main products softened, with gasoline supplied averaging 9.5 million barrels per day, down 0.1 percent from the same time a year ago, while supplied distillates averaged 3.8 million barrels per day, down 2.5 percent year-on-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.