The U.S. Energy Department's weekly inventory release showed that crude stockpiles jumped to their highest level since August 1990 amid a drop in refinery utilization. The agency’s report further revealed that refined product inventories – gasoline and distillate – dropped from their previous week levels despite weaker demand.

The Energy Information Administration ("EIA") Petroleum Status Report, which contains data for the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect businesses of companies engaged in the oil and refining industry, such as ExxonMobil Corp. ( XOM - Analyst Report ) , Chevron Corp. ( CVX - Analyst Report ) , ConocoPhillips ( COP - Analyst Report ) , Valero Energy Corp. ( VLO - Analyst Report ) and Tesoro Corp. ( TSO - Analyst Report ) .

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories rose by 883,000 barrels for the week ending May 11, 2012, after climbing by 2.13 million barrels the week before. In fact, oil supplies have shot up by 36.24 million barrels since the week ending March 16, 2012, the largest nine-week accumulation on record.

Analysts surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. ( ) , had expected oil stocks to go up some 750,000 barrels. A drop in refinery utilization rates led to the stockpile build-up with the world's biggest oil consumer even as imports fell.

In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – increased by 1.67 million barrels from previous week’s level to hit a new all-time high of 46.80 million barrels.

At 382.53 million barrels, current crude supplies are 3.1% above the year-earlier level, and are over the upper limit of the average for this time of the year. The crude supply cover was down from 25.9 days in the previous week to 25.7 days. In the year-ago period, the supply cover was 25.9 days.

Gasoline: Supplies of gasoline decreased for the fourteenth consecutive week despite domestic consumption falling 3.8% to 8.63 million barrels a day. The reduction in gasoline inventories could be attributed to lower production and a drop in imports.

The 3.30 million barrels drop – much more than analyst projections for a 200,000-barrel draw – took gasoline stockpiles down to 201.01 million barrels, the lowest since November 2008. The existing inventory level of the most widely used petroleum product is 4.2% below the year-earlier levels and is in the lower limit of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) decreased by 309,000 barrels last week, contrary to analyst expectations for a 350,000 barrel build. The fall in distillate fuel stocks – the thirteenth decline in 15 weeks – could be attributed to reduced refinery production.

At 119.49 million barrels, distillate supplies are 15.3% below the year-ago level and are in the lower limit of the average range for this time of the year.

Refinery Rates: Refinery utilization was down 0.2% from the prior week at 88.1%.