What Are Crude Stockpiles?
Crude oil stockpiles, also known as inventory, are reserves of unrefined petroleum measured in numbers of barrels. Oil producers and governments use crude stockpiles to smooth out the impact of changes in supply and demand. Inventory levels are affected by OPEC's production decisions, political events, tax policy changes, and other factors. Inventory levels affect the price of oil, with higher inventories leading to lower prices.
Crude Stockpiles Explained
Crude stockpile data for the United States is published every week by the Energy Information Agency (EIA). This data shows the level of crude stockpiles in the U.S. excluding oil held in the Strategic Petroleum Reserve (SPR). The Strategic Petroleum Reserve is an emergency fuel storage of petroleum maintained underground in Louisiana and Texas by the United States Department of Energy (DOE). It is intended for emergency use in the event of a national energy crisis. The crude stockpiles reported every week by the EIA are non-emergency reserves available for commercial use. The EIA separately publishes data for the SPR, which shows the level of strategic oil stockpiles available in the event of a national emergency.
Global Crude Stockpiles from IEA for OECD
The United States is not the only country to monitor and maintain crude stockpiles. Every month the International Energy Agency (IEA) publishes its oil market report where they disclose the crude stockpiles of OECD countries - (The Organization for Economic Co-operation and Development (OECD) is comprised of 34 member countries). These stockpiles are commercial stockpiles and are not part of the Global Strategic Petroleum Reserves (GSPR), which are crude oil inventories held by countries or private industries in preparation for future energy crises.
The IEA was founded in 1974 to help its 30 member countries manage crude stockpiles and enhance energy security in the wake of the Middle East oil crisis. Each IEA member country currently has an obligation to have crude oil stock levels that equate to no less than 90 days of net imports. The 90-day commitment of each IEA member country is based on average daily net imports of the previous calendar year. This commitment can be met through both stocks held exclusively for emergency purposes (strategic reserves) and stocks held for commercial or operational use, including stocks held at refineries, at port facilities, and in tankers in ports.
Currently, there are three net exporting IEA member countries (Canada, Denmark and Norway) which do not have a stockholding obligation under this agreement.