After eight straight weeks of higher than expected builds in crude oil inventories, today’s weekly inventory report from the Department of Energy (DoE) showed a weaker than expected (just barely) increase. While traders were expecting crude oil stockpiles to increase by 4.595 million barrels, the actual increase was 4.512 million barrels. With this week’s increase, crude oil inventories have now risen by 66.5 million barrels in the last nine weeks. This is the largest nine week increase on record, dwarfing the prior record of 41.4 million back in 2001.
As we have repeatedly highlighted in recent weeks, crude oil inventories are at historically high levels. In fact, going back to 1983 they have never been higher. As shown in the chart below, relative to the historical average for this time of year crude oil inventories are 119 million barrels, or 35%, above their historical average.