Approximately one year ago, I began publishing a series of articles on this site tracking oil inventories in an effort to aid understanding of why prices began to decline around that time. At the time, the media was consistently stating that there was an oversupply of oil in the United States but the actual numbers said differently, leading me to explain that the true story of the decline in oil prices was much more complicated than the simplistic narrative presented by the media. Around the beginning of December, the official numbers did begin to show an oversupply of oil, a situation which continues to this day. However, as I have explained before, there are reasons to believe that the official numbers may not actually reflect reality. The market trades based on the official figures however, so we are forced to rely on them when making investment decisions.
At the end of the week ended September 25, the EIA reports that the nation’s commercial inventories of crude oil contained a total of 457.9 million barrels. This is an increase of 3.9 million barrels from the 454.0 million that these same inventories contained at the end of the week ended September 18, 2015. As has been the case since December, this level is considerably higher than at the same time of last year. At the end of the week ended September 26, 2014, the nation’s commercial inventories of crude oil contained a total of 356.6 million barrels. Both the week-over-week and year-over-year growth in inventories lends support to the presence of a glut that has been blamed for pressuring oil prices downward.
Crude oil inventories were not the only thing that increased in size last week. Motor gasoline inventories also showed growth. At the end of the week ended September 25, 2015, the EIA reports that the nation’s inventories of motor gasoline contained a total of 222.0 million barrels of gasoline. This compares to 218.8 million barrels contained in these same inventories at the end of the week ended September 18, 2015. As was the case with crude oil inventories, the amount of gasoline contained in the nation’s inventories is considerably higher than at the same time last year. At the end of the week ended September 26, 2014, these same inventories contained a total of 208.5 million barrels of gasoline.
