Crude Inventories Continue To Build - Storage Facilities Approach Capacity

I apologize for being so lax in producing my weekly reports on oil inventories over the past several weeks. However, much of what we have seen over the past few weeks has merely been a continuation of the trend that has been ongoing since the end of last year. It seems that nearly every week, the amount of oil contained within the nation's commercial crude inventories hits new record highs due largely to the fact that despite continuously high oil production in the United States, imports have still remained relatively stable compared to last year.

At the end of the week ending April 3, 2015, the nation's commercial crude inventories contained a total of 482.4 million barrels of crude oil. Not only is this a record high amount of crude, but it also represents a 10.9 million barrel increase over the previous week. At the end of the week ended March 27, 2015, the same inventories contained a total of 471.4 million barrels of crude oil. As is expected, the amount of oil being held in the nation's commercial crude inventories is substantially above last year's levels. At the end of the week ended April 4, 2014, these inventories contained a total of 384.1 million barrels of oil.

Unlike the steady climb in crude oil inventories, the amount of motor gasoline contained in the nation's inventories has varied much more. The amount of gasoline contained in these inventories did build slightly over the most recent week, expanding to 229.9 million barrels at the end of the week ended April 3, 2015 compared to 229.1 million barrels contained in these inventories at the end of the previous week. However, this slight build comes following two consecutive declines in motor gasoline inventories. The one pattern that has remained the same however is that the nation's gasoline inventories consistently contained more gasoline than in the corresponding week of last year.

The amount of motor gasoline being supplied to the market has also varied somewhat over the past three weeks but most recently began to trend upward. This may be one reason why gasoline inventories increased in the most recent week. During the four-week period ended April 3, 2015, the nation's oil refineries supplied an average of 8.981 million barrels of gasoline to the market. This represents an increase over the 8.957 million barrels per day that these refineries supplied per day on average during the four-week period ended March 27, 2015. During both periods, however, the nation's refineries supplied more gasoline than during the corresponding periods of last year.

The nation's oil refineries also steadily increased their utilization over the trailing three weeks as they began to ramp up for the summer driving months. During the four-week period ended April 3, 2015, the nation's oil refineries processed an average of 15.656 million barrels of crude oil per day, compared to the 15.499 million barrels of crude oil processed during the four-week period ended March 27, 2015. This itself is an increase over the previous weeks. During the past four-week periods, the nation's oil refineries consistently processed more crude oil than during the corresponding periods of last year.

Overall, we have seen oil inventories continue to build while the spot price of WTI also increased. It is not uncertain exactly what this means, but as the nation's inventories reach capacity, we could see oil prices plunge back downward.