Econoday Report: EIA Petroleum Status Report November 12, 2009

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EIA Petroleum Status Report

Released on 11/12/2009 11:00:00 AM For wk11/6, 2009

	Prior	Actual
Crude oil inventories (weekly change)	-4.0 M barrels	1.8 M barrels

Highlights
A big build across petroleum stocks is sending oil lower. Crude stocks rose 1.8 million barrels in the Nov. 6 week to 337.7 million, swollen by a rise in imports of 530,000 barrels a day to 8.7 million a day. Gasoline stocks rose 2.5 million barrels to 210.8 million with distillate stocks, reflecting weak demand for diesel and heating oil, up 0.3 million barrels to 167.7 million. Demand for gasoline sank for a third week, down 100,000 barrels a day to 8.9 million barrels a day. The bottom line is that supplies are swollen and demand has yet to strengthen. Oil is down about $1 to $77 in initial reaction to the report.

Definition
The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products. Why Investors Care

As is evident from the chart, crude oil stocks can fluctuate dramatically over the year. When oil prices nearly reached $50 per barrel in August 2004, financial market players began to monitor crude oil inventories. It is not surprising to see sharp price hikes in crude oil when inventories are falling. Conversely, one would expect price declines when inventories are rising.

Data Source: Haver Analytics

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