Jun 24, 2013 | by Franck Cushner, CFP®
Oil inventories in the United States hit a record high this month, reaching levels never achieved since data gathering began in 1978. The U.S. Energy Information Administration (EIA) gathers and releases inventory data on oil supplies throughout the country every week. This data is critical to the price of oil and gasoline, as it helps establish prices based on supplies and availability.
Several factors may affect oil supplies nationwide, such as production interference, regulations, and natural disasters. Hurricanes in the Gulf of Mexico as well as tornados in the mid west, can affect supplies locally as well as nationally depending on the severity of damages caused.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased to a record 397.6 million barrels as of May 24th. Such a build up in inventory directly affects the commodities and financial markets surrounding oil prices. With such an abundance of oil supplies, many market watchers expected to see lower oil and gasoline prices, however that hasn’t been the case. As of May 31st, WTI Crude Oil closed at $91.61 per barrel.
On a related note, the International Energy Agency released its findings on the global oil market and where future oil is expected to come from. The International Energy Agency (IEA), is an autonomous organization, which works to ensure reliable, affordable and clean energy for its member countries.
The IEA report, released on May 14th, expects that the surge in North American oil production will be transformative to the global oil markets over the next five years. It is also expected that this dynamic will reshape the way that oil is transported, shipped, stored, and refined internationally.
Sources: IEA, U.S. Energy Department
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