The United States Energy Information Administration released its latest report on the status of oil inventories in the United States on November 26, 2014.  This is the report for the week of November 21. The report shows much the same as has been occurring over the past several weeks.  While both commercial oil inventories and motor gasoline inventories have increased in size compared to where their levels were at the end of the previous week, the nation’s inventories of both chemicals remained lower than what they contained last year.  However, there was a change to the dominant trend in motor gasoline production, as it was higher in the four weeks period ending November 21 compared to the levels where it was last year.

At the end of the week ended November 21, 2014, the nation’s commercial crude inventories, excluding the Strategic Petroleum Reserve, contained a total of 383.0 million barrels of oil, an increase of 1.9 million barrels over the previous week.  However, as has been the case since I began publishing these reports several weeks ago, this was a much lower level than what these inventories contained at the end of the same week last year.  At the end of that week, the nation’s commercial crude inventories contained 391.4 million barrels of crude.  This continues to point to the fact that the nation is not particularly oversupplied with crude compared to last year, despite the fact that the price action in the market would seem to imply this.

In a continuation of the trend that has been occurring over the past few weeks, the nation’s inventories of motor gasoline also increased from the previous week.  At the end of the week ended November 21, the United States had a total of 206.4 million barrels of motor gasoline in all of its inventories combined.  At the end of the week ended November 14, the same inventories contained 204.6 million barrels.  This is lower than last year but it is rather interesting that the trend has been the opposite from year to year.  Last year, the amount of gasoline in inventories was declining throughout the month of November as this chart shows.  This year, the amount of gasoline in inventories has been increasing.  While this could be indicative of an oversupply in gasoline, the trend in oil inventories was weaker this year compared to the same period last year.

One reason why gasoline inventories are growing may be that the amount of oil that is being processed by the nation’s refineries has been growing.  During the four week period ending November 21, the nation’s refineries processed an average of 15.777 million barrels of crude oil per day.  This is an increase from the four week period ending November 14, during which the nation’s refineries processed an average of 15.570 million barrels of oil per day.  This is also higher than last year’s levels, in which the nation’s refineries processed an average of 15.369 million barrels of oil per day during the corresponding period last year.

Further evidence that gasoline production levels are higher than last year can be found by looking at the amount of gasoline that refineries supplied to the marketplace.  During the four week period ended November 21, the nation’s refineries supplied an average of 9.154 million barrels of gasoline per day to the market.  This is a departure from the trend that we have been seeing as it is actually greater than the amount of gasoline produced during the corresponding four week period last year.  It is also significantly higher than the amount of gasoline supplied during the four week period ended November 14.

In conclusion, there continues to be little evidence that the United States is oversupplied with crude oil as levels are much lower than last year and thus if such a glut exists now then it must have also existed and been even worse last year.  However, there are signs that the nation is seeing a definite growth in gasoline production that may exceed the growth in demand over the same period.  However, this increase in production also comes during a time when many Americans are going to be using more gasoline than normal due to the impending holiday season.  Thus, it will be interesting to see how this ultimately plays out.