FREE Guide - 5 Chart Patterns You Need to Know!

EIA Petroleum Status Report: An Overview on Reading it

Release Date: Every Wednesday
Release Time: 10:30am ET
(See the weekly reports)

When Energy Information Administration publishes its Petroleum Status Report almost every Wednesday at 10:30 ET, the financial news media usually present their data in a format resembling this report, which was issued on May 6, 2015:

Crude oil inventories (weekly change)

-3.9 M barrels

Gasoline (weekly change)

0.4 M barrels

Distillates (weekly change)

1.5 M barrels

This data represents the amount of crude oil, gasoline, and distillates (such as fuel oil and diesel) in storage facilities such as those in Cushing, Oklahoma and other locations.

However, despite some peoples’ first impressions, this weekly report in its entirety is voluminous in the extreme, with 14 tables, 10 illustrative figures, and three appendices. Moreover, the EIA has 370 employees in its Washington, D.C. offices, and a yearly budget of $117 million. Arguably, the energy industry is indeed that complex, and requires these gargantuan resources to record and analyze its productions and transactions.

All of this data tends to create information overload in many market participants, with the result that many concentrate on the headline numbers above to the exclusion of the other information in the report. To some extent this makes sense: most of the information in the literally dozens of pdfs that make up this report is probably not directly germane to most peoples’ analyses.

However, when one goes to the EIA website to read the report, (, the second PDF listed there is entitled “Highlights,” a document that contains a great deal of information that would be of interest to many analysts, investors, and traders. This document is usually only about a page long, but it is packed with information.

For instance, on May 6, the same date as the data mentioned above, the “Highlights” reports begins, “U.S. crude oil refinery inputs averaged over 16.3 million barrels per day during the week ended May 1, 2015, 247,000 barrels per day more than the previous week’s average.” This is arguably an important piece of information. Those who follow the industry know that 16.3 million barrels is historically a high number, and that number had risen a brisk 247,000 over the previous week. Moreover, refiners were operating at 93% capacity that week, another historically high number. Now, the recent $9.00 rally over the past week   to $62.50 had been buttressed, perhaps more than anything, by the precipitous drop in the rig count, for a record 21 consecutive weeks, to its lowest level since 2010. If traders think the low rig count has made crude oil unavailable to American refiners, they’re obviously mistaken. There’s still plenty of crude available to them.

On the other hand, there is also evidence in the “Highlights” report for the bullish case for oil prices. The next paragraph of this week’s Highlights begins, “U.S. crude oil imports averaged over 6.5 million barrels per day last week, down by 905,000 bpd from the previous week.” This is very possibly an indication that the geopolitical worries many in the trade have felt concerning violence in Yemen and Libya are indeed realistic and that these disturbance are perhaps actually reducing imports. Of course, all of this is mostly conjecture at this point and most will need to flesh out their hypotheses further before acting on them; but on the other hand, investors know that quite often they need to act on incomplete information.

Let’s go back to the day the above data was released, May 6, 2015. That was a strong rally day for crude oil. When the headline numbers were released, prices rallied abruptly over 3 percent to $62.50 briefly before retreating almost as abruptly. At this point, it was clear to most observers that that burst of buying pressure after the release of the number was caused by that first number, crude oil inventories, which were down 3.9 million barrels. This was the first reduction in these inventories since the first days of January and it was regarded by some as a signpost indicating that the big build in inventories was reversing substantially. However, as famed commentator Dennis Gartman explained, inventories of gasoline and distillates were up, so that the whole picture drawn by these three headline numbers was not as bullish as it first appeared to many.

From the perspective of investors and traders, what is perhaps most noteworthy here is what the EIA supply report did NOT tell us. Certainly, the 3.9 million barrel drawdown was relevant and moved the market; however, much of the most compelling data for that week was not found in this report at all. The rig count, data of focal importance for oil traders and investors, is published by Baker Hughes, the oil services company. Also, within a few hours of the EIA report, delegates from OPEC revealed that its members we inclined to preserve market share rather than cut production, a bearish development. Also, continued snippets of bad news from Yemen and Libya, to which the market is almost always sensitive, hit the wires at about the same time.

It's worth noting The American Petroleum Institute, a trade association, provides an entirely different set of inventory and production statistics along with a different spin on them.  So, though it can be a lot of work absorbing and evaluating these weekly EIA petroleum reports, there are plenty of other important inputs for market participants to keep track of.

Get This FREE Technical Analysis Guide!
Timing is everything, and with this guide, you'll learn how technical analysis can help find the right time to enter and exit your futures trades. Nearly 30 explanations and examples of the most popular technical analysis tools are all in this one handy guide. It's like having a futures trading mentor at your side!