The EIA reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by a whopping 6.2 million barrels. The build was a result of U.S. crude oil imports that averaged just less than 9.3 million barrels per day last week, up by 1.2 million barrels per day from the previous week. The increase in supply may be a result of inversed OPEC production and slow refinery runs. The EIA reported that US crude oil refinery inputs averaged nearly 14.1 million barrels per day, 27 thousand barrels per day below the previous week's average. Refineries operated at 82.7 percent of their operable capacity last week.
Oil prices dutifully fell after the report, yet came back as the market was getting ready for that oil price friendly Fed meeting. It may also have something to do with the fact that gas supply fell for what seems like the millionth week in a row. The EIA said that total motor gasoline inventories decreased by 2.5 million barrels last week and are in the lower limit of the average range. Refinery issues played a part as gasoline production fell averaging 8.8 million barrels per day.
High prices and lousy weather has cut into demand as the EIA said that over the last four weeks, motor gasoline product supplied has averaged about 9.1 million barrels per day, down by 1.6 percent from the same period last year. Still the drawdown in supply means that the increase in retail gas price is not yet over. Add to that the impact of the Fed decision, and you might want to fill your tank today.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.