Crude oil prices tumbled this week to the lowest price since early July, trading under $85 per barrel on Wednesday. Over the course of a week, prices collapsed more than $7.50 (-8.1 percent) amidst rising supplies. U.S. crude oil inventories are now near 375 million barrels nationwide, around 12 percent higher than the average supply for this time of year and a record supply for this week since the Department of Energy began keeping records of weekly supply data in 1982.
Despite the high crude oil supply levels, gasoline and diesel fuel stockpiles are well below average. This has resulted partially from supply inefficiencies that have trapped a large volume of the crude oil in the Upper Midwest with few refineries nearby to process the crude into gasoline and diesel fuel. At the same time, other regions of the country, such as California and New England, are dependent on importing foreign oil to feed their refineries, which has contributed to higher prices in those areas.
Global oil prices remain higher than U.S. prices because of ongoing supply threats, especially in the Middle East. As of midday yesterday, U.S. crude oil for delivery during December was worth $86, while Brent crude, a major European benchmark, commanded a 26 percent premium at $109 per barrel.
