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.
Highlights
A rise in inventories is making for a drop in oil this morning. Oil inventories rose 2.5 million barrels in the August 19 week with product inventories flat, at no change for gasoline and up only 0.1 million barrels for distillates. Testing $47, WTI is down 50 cents in immediate reaction.