Crude oil inventories saw a much larger than expected increase in the latest week, surging by 13.83 million barrels compared to the consensus forecast of a 2.5 million barrel build in stockpiles. This week’s increase represents the second largest weekly build in stockpiles going all the way back to 1983. The only week in the last 34 years that saw a larger weekly increase in inventories was last October when stockpiles increased by 14.42 million barrels. The key difference between last October and this week’s build in stockpiles is that back in October, the weekly build followed several drawdowns in the prior week, including the second-largest single week decline on record whereas this week’s build followed four prior weeks where inventories also increased.
The chart below compares weekly crude oil inventories in 2017 to weekly levels in 2016, as well as the ten-year average and the average going back to 1983. Needless to say, inventory levels are way above average. In fact, this week’s level of just under 540 million barrels is the fifth highest weekly reading since at least 1983, and that puts total stockpiles 206 million (57%) above their historical average for this time of year.
While crude oil inventories spiked this week, gasoline stockpiles saw an unexpected decline after five straight weeks of large builds. While traders were expecting a build in inventories of 1.5 million barrels, stockpiles actually declined by 839K. Like crude oil, as shown in the chart below, gasoline stockpiles are well above their historical average, but not to nearly the same degree. Additionally, at this point inventory trends seem to be following last year’s trends pretty closely.