Oil inventory refers to crude oil and petroleum product stocks held in storage facilities, providing buffer supply for market disruptions and seasonal demand variations. Inventory levels significantly influence oil prices, with high inventories typically pressuring prices downward while low stocks support higher prices. Weekly inventory reports are major market-moving events.

Oil inventory data includes crude oil stocks, gasoline, distillates, and other refined products across different geographic regions. Inventory changes reflect supply-demand imbalances and help predict future price movements. Strategic petroleum reserves and commercial inventories serve different purposes but both affect market dynamics.

Real-world example: U.S. crude oil inventories increase by 5 million barrels versus expected 2 million barrel build, causing WTI crude prices to decline $2 per barrel as traders interpret the larger build as indicating oversupply conditions.