Today's Report (11/24/2021)
According to the Energy Information Administration, US oil stockpiles increased more than expected last week.
The EIA reported on Wednesday that crude stockpiles increased by 1.017 million barrels last week. This was in contrast to analysts' expectations of a draw of 481,000 barrels.
Distillate stockpiles, which include diesel and heating oil, fell by 1.968 million barrels last week, compared to expectations for a draw of 1.002 million barrels, according to EIA data.
The EIA reported a draw of 603,000 barrels in gasoline inventories last week, compared to a draw of 461,000 barrels expected.
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.