The latest weekly petroleum status report from the Energy Information Administration (EIA) shows crude inventories continue to build, now for the eighth consecutive week. Total domestic inventories sit at 442.1 million bbl, which is 16.9 million bbl lower than levels at this time last year. Inventories grew as the EIA reported the U.S. hit a new record for crude production last week. At 11.7 million b/d, it is the highest rate on record since the EIA began tracking it in 1983.
Growth in global crude production, including in the U.S., combined with weaker than expected global crude demand for the fourth quarter are leading some market observers to worry that the global crude supply glut from 2017 has returned. The concerns have led to a 12-day drop in crude prices, which could see WTI prices fall below $50/bbl — prices not seen since October 2017. At the end of Wednesday’s trading, crude prices settled at $56.25. Since crude prices constitute approximately 50 percent of the price American motorists pay at the pump for gasoline, a continued drop in crude prices will likely bring even cheaper pump prices this winter.