Today's Report (01/05/2022)

The Energy Information Administration reported on Wednesday that crude stockpiles in the United States fell while gasoline and distillate inventories increased.

Crude inventories fell by 2.1 million barrels to 417.9 million barrels in the week ending Dec. 31, compared to analysts' expectations of a 3.3 million-barrel drop.

The EIA reported that crude stocks at the Cushing, Oklahoma, delivery hub increased by 2.6 million barrels in the previous week.

According to the EIA, refinery crude runs increased by 164,000 barrels per day in the last week. The utilization rate of refineries increased by 0.1 percentage points last week.

The EIA reported that gasoline stocks in the United States increased by 10.1 million barrels last week to 232.8 million barrels, compared to analysts' expectations of a 1.8 million-barrel increase.

Distillate stockpiles, which include diesel and heating oil, increased by 4.4 million barrels last week to 126.9 million barrels, compared to a 1.5 million-barrel increase expected, according to EIA data.

According to the EIA, net US crude imports fell by 500,000 barrels per day last week.


Market Reaction

Following the release, WTI Crude Oil saw some movement towards the downside.


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.