Release Explanation: This is the DOE (Department of Energy) Crude Oil Inventory, EIA (Energy Information Administration) Weekly Oil Inventory. It measures changes in crude oil production, refinery inputs and utilization, production by product; current inventory level of crude and related products as well as an estimate of how many days of supply is currently available. Increasing or decreasing inventory figures leads to an adjustment of price action that in time will spread throughout the economy. Currently, it is estimated that for every one percent of GDP growth, oil consumption increases by one quarter to one third of a percent, so oil inventories must be able to increase along with the economy or another gasoline shortage may occur. It is also worth noting that at an average price of $75.00 a barrel, the U.S. spends one billion dollars a day on crude.

Crude oil price is on the same level as interest rates when it comes to its impact on the economy. It affects every release. The product is responsible for much of our trade deficit; it is used throughout the product/service cycle, and also has a significant impact on consumer spending as well as inflation. The initial affect on the U.S. dollar tends to be the inverse of oil prices. For example, higher oil price leads the greenback lower since it suggests higher trade deficits and a possible decrease on consumer spending. However, the real impact of oil prices (and inventory levels) is felt farther down the road as prices influence headline and core inflation.

Trade Desk Thoughts: U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased 0.7 million barrels from the previous week. At 350.6 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 0.2 million barrels last week, and are in the lower half of the average range. Finished gasoline inventories decreased last week while gasoline blending components inventories increased during this same time.

For a fourth week, demand for gasoline increased from a similar period a year ago, said Matthew Carniol, chief currency strategist at

Total products supplied over the last four-week period have averaged 19.5 million barrels per day, down by 1.3% compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged 9.0 million barrels per day, up by 2.2% from the same period last year. Jet fuel demand is 15.1% lower over the last four weeks compared to the same four-week period last year.

Forex Technical Reaction: Oil futures were at the top of the session prior to the report, and fell to 30 minute support afterwards. The cad held steady around 1.2840.