Today's Report (12/15/2021)

The Energy Information Administration reported on Wednesday that US oil stockpiles fell more than expected in the previous week.

Last week, crude inventories fell by 4.584 million barrels, compared to analyst expectations for a draw of 2.082 million barrels.

Distillate stockpiles, which include diesel and heating oil, fell by 2.853 million barrels last week, compared to an expected build of 688,000 barrels, according to EIA data.

The EIA reported that gasoline inventories fell by 719,000 barrels last week, compared to expectations for a build of 1.606 million barrels.


Market Reaction

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


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.