According to the U.S. government, there are over 1.3 billion barrels of crude oil and refined products in commercial storage around the United States, an increase of more than 300 million barrels in the last two years. There is a tendency to assume all these barrels of crude and products are “excess” inventories, the result of overproduction, but most of them are held for operational reasons. The best way to distinguish excess inventories from normal operational stocks is to adjust reported inventories for time of year, consumption of crude by refineries, and consumption of products by end customers. Other things being equal, the more crude refineries process every day, the more crude they need to hold on site, at tank farms or en route to the refinery in pipelines and on ships to keep their distillation […]