May 15, 2009, Crude Inventories Down – Markets Up

What does it mean when crude inventories decrease? Well here is the latest release from the Department of Energy.

U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the week ending May 15, down 315 thousand barrels per day from the previous week’s average. Refineries operated at 81.8 percent of their operable capacity last week. Gasoline production remained relatively unchanged from last week, averaging 8.7 million barrels per day. Distillate fuel production also remained unchanged from last week, averaging 4.1 million barrels per day.

U.S. crude oil imports averaged nearly 8.8 million barrels per day last week, up 83 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 9.3 million barrels per day, 453 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 938 thousand barrels per day. Distillate fuel imports averaged 173 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.1 million barrels from the previous week. At 368.5 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year. Total motor gasoline inventories decreased by 4.3 million barrels last week, and are below the lower limit of the average range. Both finished gasoline inventories and gasoline blending components inventories decreased last week. Distillate fuel inventories
increased by 0.6 million barrels, and are above the upper boundary of the average range for this time of year. Total commercial petroleum inventories decreased by 0.8 million barrels last week, and are above the upper limit of the average range for this time of year.

Total products supplied over the last four-week period has averaged nearly 18.3 million barrels per day, down by 7.6 percent compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged about 9.1 million barrels per day, down by 1.2 percent from the same period last year.
Distillate fuel demand has averaged 3.5 million barrels per day over the last four weeks, down by 12.0 percent from the same period last year. Jet fuel demand is 9.0 percent lower over the last four weeks compared to the same four-week period last year.

Broadly speaking when inventories are down that means demand is up or supply is being cut. For oil prices that means appreciating, for the economy, it may be a sign that things are improving as consumption for oil increases.

So perhaps there is more production and activity going on indicative of the supply decrease. Or perhaps everyone just drove their cars on the weekend. We would prefer to opt for the former.

[tags]oil prices, energy prices, oil, crude oil[/tags]

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