The US crude oil inventory report affects oil prices and thus inflation and other key economic indicators.
The US Energy Information Administration’s Crude Oil Inventories report quantifies the number of barrels of crude oil stored by US companies.
Why does the US inventory report affect oil prices?
International oil and energy market experts stressed that the reason for the impact of US oil stocks on oil prices is because the United States is the world’s largest oil consumer.
The experts added that the United States consumes about 19.7% of the world’s consumption annually, so any change in its crude stocks affects oil prices, inflation and other important economic indicators.
The experts added, just as the United States of America is the largest oil producer in the world, so the change in stocks of US companies affects the supply of oil in the markets, and therefore oil prices.
Oil prices rise as inventories fall
Oil prices soared, rising in turbulent trading on Wednesday, due to the halt in crude exports from Russia and Kazakhstan through the Caspian Sea pipeline, and the decline in US oil stocks.
Brent crude futures closed at the close of trading on Wednesday up $6.12, or 5.3%, at $121.60 a barrel, according to Reuters.
And the price was registered at 1100 GMT, down 2.7%, to register 118.61 dollars a barrel.
The price of West Texas Intermediate crude oil futures contracts also closed, in trading on Wednesday, higher by $5.66, to register a close of $114.93 per barrel, and the price had previously reached $111, 96 dollars per barrel.
US stocks crash
The US Energy Information Administration said on Wednesday that US crude oil inventories posted a flash drop last week, while gasoline and distillate inventories fell more than expected.
The government body added that crude inventories fell by 2.5 million barrels in the week ending March 18, to 413.4 million barrels, compared to the expectations of analysts consulted by Reuters, who referred to an increase of 114 thousand barrels.
Oil inventories at the delivery hub in Cushing, Oklahoma, rose by 1.2 million barrels.
Data from the Energy Information Administration showed U.S. refinery crude consumption rose by 277,000 barrels per day last week, with refinery operating rates rising 0.7 percentage point.
The data indicated that US gasoline stocks fell by 2.9 million barrels over the past week to 238 million barrels, while a drop of two million barrels was expected.
Distillate stocks, which include diesel and heating oil, fell 2.1 million barrels to 112.1 million barrels, versus expectations for a 1.4 million barrel decline.
The Energy Information Administration said net US crude oil imports fell last week by 817,000 barrels per day to 2.64 million barrels per day.
The United States is the country that consumes the most oil in the world.
A report prepared by British Petroleum “BP”, last June, showed that the United States of America ranked first, as the largest oil consuming country in the world, with a consumption of 19.4 million barrels per day, which constitutes 19.7 percent of global consumption. volume, followed by China with 14.05 million barrels per day, which represents 14.3% of world consumption.
India ranked third in the world with consumption of 5.27 million barrels per day, accounting for 5.4% of the world total, then Japan with 3.81 million barrels per day, accounting for 3 .9% of world consumption.
The United States is the country with the highest oil production in the world.
The United States also topped the list of the world’s largest oil-producing countries (most producers) during the year 2020.
According to the statistical review issued by the British company “BP”, for the month of July 2021, the total production of the United States of crude oil and condensate amounted to 16,476 million barrels per day in 2020.
According to a report from the US Energy Information Administration, issued in March, US oil production fell for the second year in a row to 11.2 million barrels per day in 2021, from a record level of 12.3 million barrels per day in 2019.
Production is expected to recover to 12 million barrels per day in 2022 and 13 million barrels per day in 2023, according to forecasts from the US Energy Information Administration.