Today’s weekly inventory report from the Department of Energy (DoE) showed a monster build in crude oil inventories for the second straight week. It’s typical for crude inventories to rise at this time of year, so the fact that inventories rose was not the surprise, what was a big surprise was the magnitude of the build. Traders were expecting stockpiles to rise by 3.5 million barrels, but the actual build in inventories was more than twice that at 8.028 million barrels, which was the largest one-week increase since April. In the last two weeks now, crude oil inventories have risen by more than 15.5 million barrels which represents the 16th largest two-week build in inventories since 1983.
The chart below compares changes in crude oil inventory levels this year versus the average changes over the last ten years and since 1983. Comparing the pattern of this year to the historical averages shows similar patterns in terms of when stockpiles rise and fall. The big difference is the magnitude of the move. This year started off with much larger than average inventory levels and that trend has only continued throughout the year. As of the most recent reading, stockpiles are more than 150 million or 43.4% above their historical average.