According to statistics released Thursday by the Energy Information Administration, US crude-oil stockpiles climbed considerably more than predicted last week as refinery output fell dramatically.

Benchmark u.s. oil prices that were higher before the somewhat bearish report came out reduced those gains afterward. the Nymex front-month crude contract for November delivery was recently up 0.5% at $80.85 a barrel.

crude-oil stockpiles climbed by 6.1 million barrels to 427 million barrels, and are now about 6% below the five-year average, the EIA said. Analysts had predicted crude stockpiles would rise by just 900,000 barrels from the prior week.

US crude oil production rose by 100,000 barrels a day last week to 11.4 million barrels a day, according to EIA.

Gasoline stockpiles fell by 2 million barrels to 223.1 million barrels, compared with analysts' expectations for inventories to increase by 600,000 barrels from the previous week.

Distillate stocks, which include heating oil and diesel fuel, were virtually unchanged, falling by a tiny 24,000 barrels to 129.3 million barrels, and are now about 9% below the five-year average, the EIA said. analysts were forecasting a 1.1-million-barrel decline from the previous week.

What Is It?

Provides weekly information on petroleum inventories in the US, whether produced here or abroad. It provides a weekly total of inventories either added or reduced.

What Are The Fundamental Effects?

Energy prices generally rise during periods of economic expansion and fall during recessions. They’re certainly subject to inflationary pressures. Rising prices can impact pricing for products and services. These include heavy industry, transportation, and even retail. It directly affects consumer prices for a number of products.

How Does It Affect The Markets?

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. If inventories are high and rising in a period of strong demand, prices may not need to increase at all, or as much.

Some More Insight

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.