{"id":51606,"date":"2017-02-15T17:23:12","date_gmt":"2017-02-15T23:23:12","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=51606"},"modified":"2017-02-15T17:39:34","modified_gmt":"2017-02-15T23:39:34","slug":"record-high-u-s-oil-inventories-have-little-effect-on-markets","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/record-high-u-s-oil-inventories-have-little-effect-on-markets\/","title":{"rendered":"Record high U.S. oil inventories have little effect on markets"},"content":{"rendered":"

By Hannah Levitt<\/strong><\/p>\n

U.S. crude oil inventories increased by 9.5 million barrels, bringing total inventories to a record high of 518.1 million barrels for the week ended February 10 according to the U.S. Energy Information Administration.<\/p>\n

This was the sixth consecutive week of increases. It came in contrast to the expected increase of 3.5 million barrels according to analysts surveyed by Bloomberg.<\/p>\n

Despite an unexpected rise in inventories, WTI crude oil prices closed Wednesday at $53.06 per barrel, just 0.3 percent lower than Tuesday\u2019s closing price of $53.20.<\/p>\n

<\/p>\n

\"Crude
Despite oil inventories almost three times higher than expected, WTI crude oil prices decreased just 0.3 percent Wednesday. (Hannah Levitt\/MEDILL)<\/figcaption><\/figure>\n

The PRICE Futures Group Senior Analyst Phil Flynn explained that prices ultimately did not move very much today due to big picture indications of a much tighter oil market in the coming months.<\/p>\n

\u201cEven though we saw a much bigger than expected increase in oil inventories, if you look beyond the numbers there are signs that these big increases are going to be coming to an end pretty soon,\u201d Flynn said.<\/p>\n

According to Flynn, these signs include decreased supply due to the Organization of Petroleum Exporting Countries production cuts.<\/p>\n

\u201cIf you look around the globe, inventories are already falling and the price of oil, for example in Europe, is at the highest level it\u2019s been versus the U.S. in a couple of years,\u201d Flynn said. \u201cThe reason why that is is because they\u2019re the first ones that are feeling the brunt of OPEC production cuts, and so because they\u2019re closer to OPEC oil they\u2019re already seeing their inventories go down.\u201d<\/p>\n

Flynn expects the U.S. to feel an increased effect from the OPEC cuts in the coming weeks. Additionally, oil refinery demand at this time of year is relatively weak due to maintenance, but around Easter demand will begin ramping back up, driving down supplies, Flynn said.<\/p>\n

“Basically what we are seeing is global demand rising over time, global production is going to fall, and that’s going to tighten supplies which should drive up prices next year,” Flynn said.<\/p>\n

GasBuddy Director of Public Relations Allison Mac also pointed to refinery maintenance to explain why gas prices are still predicted to jump in 2017, despite a 2.8 million barrel increase total motor gasoline inventories last week according to the EIA.<\/p>\n

\u201cAverage gasoline prices will rise 35-75 cents between recent lows and peak prices, just in time for spring break travel plans,\u201d Mac said in a GasBuddy blog post.<\/p>\n

The average price of gas in Chicago is currently $2.43 per gallon according to GasBuddy, but is expected to climb to $3 per gallon this spring, Mac said.<\/p>\n

Photo at top: A gas pump at a Shell station on Chicago’s North Side. Though regular unleaded gas is currently under $3 per gallon at this station, Chicago average gasoline prices are expected to rise above $3 per gallon this spring as U.S. oil inventories are expected to decrease. (Hannah Levitt\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Hannah Levitt U.S. crude oil inventories increased by 9.5 million barrels, bringing total inventories to a record high of 518.1 million barrels for the week ended February 10 according to the U.S. Energy Information Administration. This was the sixth consecutive week of increases. It came in contrast to the expected increase of 3.5 million […]<\/p>\n","protected":false},"author":384,"featured_media":51695,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,3516],"tags":[],"class_list":["post-51606","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2017"],"yoast_head":"\nRecord high U.S. oil inventories have little effect on markets - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/record-high-u-s-oil-inventories-have-little-effect-on-markets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Record high U.S. oil inventories have little effect on markets - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Hannah Levitt U.S. crude oil inventories increased by 9.5 million barrels, bringing total inventories to a record high of 518.1 million barrels for the week ended February 10 according to the U.S. Energy Information Administration. 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