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Crude oil inventories fell by 400,000 barrels last week, but that tells only a small part of the story. Inventories are very near the top of the average range in absolute terms – number of barrels – and inventory drops are expected in this season. (See the graph below.) But even that is only part of the story, as consumption is down. So, in terms of days of supply, crude oil inventory levels are actually well above average for this time of year. The news isn't as good for gasoline, where inventory levels are near the bottom of the average range and also fell by 1.6 million barrels last week and are now below the average range, but again that is in absolute terms and consumption is down considerably. The trend with crude oil is headed toward above average supplies, while the gasoline inventory trend is back into the average range after dropping drastically in September and October as refineries were offline due to storm outages.

US Petroleum Supplies and Refining At a Glance

• Total Petroleum Inventories: Down 400,000 barrels
• Crude Oil Inventories: Down 400,000 million barrels
• Gasoline Inventories: Down 1.6 million barrels
• Distillate Fuels Inventories: Down 1.7 million barrels
• Propane/propylene inventories: Unchanged
• Refinery Crude Inputs: 14.6 million barrels/day
• Change: Down 258,000 barrels/day
• Refinery Activity: 84.3%

US Petroleum Demand At a Glance
Compared to Same 4-Week Period Last Year

• Total Products Supplied: Down 6.2%
• Gasoline: Down 3.2%
• Distillate Fuel: Down 2.2%
• Jet Fuel: Down 16.7%

This Week in Petroleum compares the gasoline inventory and price situation this year compared to 2005 after hurricanes hit the Gulf Coast and among several differences notes that suppliers did a better job managing supplies this year, helping buffer price shocks:

Gasoline inventories actually reached lower levels in 2008 than in 2005. In both cases, retail outages along the pipelines were mainly caused by the loss of refinery supply into the pipelines. Since tight supply often leads to higher prices, a large price jump, as occurred in 2005, might have been expected on top of already high prices. However, while prices did increase temporarily, particularly in areas of the South where retail outages were concentrated, national average gasoline prices did not spike as they did in 2005. Crude oil prices were already declining by this point in 2008, helping to keep retail prices in check. Furthermore, suppliers had learned from the 2005 hurricanes how to better manage supplies under similar conditions.

Oil Report and This Week in Petroleum - December 3, 2008 [PDF]

Full current report with data tables [PDF]