For the sixth week in a row, the EIA Weekly Petroleum Status report showed a decline in the nation’s inventories of crude oil. This continues to show, as I have noted previously, that the oversupplied market situation in the United States may be coming to an end. With that said however, there is no shortage of oil in the country as inventories still remain well above the levels that they had last year.  We also see evidence in the latest report that demand has begun to climb, likely due to the beginning of the summer driving season.

At the end of the week ended June 5, 2015, the nation’s commercial crude oil inventories contained a total of 470.6 million barrels of oil. This is a fairly marked decrease from the 477.4 million barrels that were contained in these same inventories at the end of the week ended May 29, 2015.  However, as mentioned in the introduction, this week’s inventory level is still considerably above where it was at the end of the corresponding week of last year. At the end of the week ended June 6, 2014, the nation’s commercial inventories of crude oil contained a total of 386.9 million barrels of oil.

A similar decline occurred in the nation’s inventories of motor gasoline, showing that consumers (and possibly businesses too) have increased their demand for the fuel. At the end of the week ended June 5, 2015, the nation’s commercial inventories contained a total of 217.4 million barrels of gasoline. This compares to the 220.3 million barrels of gasoline contained in these same inventories at the end of the previous week. However, much like crude oil inventories, motor gasoline inventories remain noticeably above the levels that they held in the same week of last year. At the end of the week ended June 6, 2014, the nation’s inventories of motor gasoline contained a total of 213.5 million barrels.

This decline in gasoline inventories comes in spite of the fact that the nation’s refineries are producing more gasoline than they did in the preceding weeks. This provides evidence that consumers have increased their demand for gasoline in response to the improving weather in many parts of the country. During the four-week period ended June 5, 2015, the nation’s oil refineries in aggregate supplied an average of 9.393 million barrels of gasoline per day to the market. This is an increase over the four-week period ended May 29, 2015 in which these refineries supplied an average of 9.,294 million barrels of gasoline to the market every day. As has been the case for some time now, this is significantly higher than the amount of gasoline supplied to the market by these refineries during the corresponding period of last year. During the four-week period ended June 6, 2014, the nation’s refineries supplied an average of 9.053 million barrels of gasoline per day to the market.

One reason why refineries are producing more gasoline is that they are processing more crude oil. During the four-week period ended June 5, 2015, the nation’s refineries processed an average of 16.412 million barrels of crude oil per day. This is higher than the 16.260 million barrel per day average that they processed during the four-week period ended May 29, 2015. Refineries are also processing significantly more oil than they did last year.  During the four-week period ended June 6, 2014, the nation’s oil refineries processed an average of 15.851 million barrels of crude oil per day.

Thus, we are continuing to see signs that the previous oversupply of oil that was present in the United States may be beginning to abate.