Inventories of winter fuels, including propane, natural gas, coal used for electricity generation and distillates, which includes heating oil, are well above typical historical levels as the 2009-2010 winter heating season draws closer, the Energy Information Administration reports.

“Current high inventories stem primarily from the recession,” the agency said. “As the economic downturn deepened throughout 2008 and 2009, energy demand fell, but supply was relatively slow to respond.”

Despite the recession, which data shows began in the United States in December 2007, and a sharp rise in oil prices through July 2008, total world oil demand increased 1.1 percent in the first half of 2008 and total world oil supply climbed 1.8 percent for the period. World oil demand fell in the third and fourth quarters of 2008, but global oil supply did not drop from 2007 levels until the fourth quarter 2008.

EIA stated that crude oil contango, which is when prompt month prices are lower than future prices, also encouraged extra stock building, which eventually overflowed into floating storage, as on-land tanks filled toward capacity.

U.S. crude oil inventories stood at relatively low levels in mid-2008 but began to steadily climb over the second half of the year as imports and production exceeded refinery throughput. Supply reached 375.0 million bbl on May 1, the highest level of this year and more than 14 percent above the five-year average. While crude oil supply began a seasonal decline, inventories at 338.4 million bbl as of the week-ended Sept. 25 are well above normal levels.

Meantime, refinery production, particularly for distillate fuels, also ran ahead of demand. During 2008, U.S. refiners shifted operations to produce more distillate fuel relative to gasoline to take advantage of an attractive export market. EIA stated that that in early 2009 refiners reduced crude runs due to declines in total petroleum demand from 2008 levels.

“As gasoline demand picked up seasonally over the summer, refinery utilization also increased, pulling down some of the crude oil inventory surplus,” said EIA. “While refiners avoided large gasoline stock builds over the summer, distillate inventories grew to unusually high levels, as domestic distillate demand fell much more than expected and much more sharply than gasoline.”

“Further undermining still relatively high distillate yields, actual distillate export market opportunities in 2009 fell well below those seen in 2008,” the agency continued.

As of the week-ended Sept. 25, total distillate stocks were 171.0 million bbl, which is 29 percent above the five-year average level. As of July, which is the latest data available, middle distillate supply for the U.S. and European countries belonging to the Organization for Economic Cooperation and Development combined stood at nearly 41 days of supply, which is almost nine days higher than the five-year average for the time of year.

Similarly, EIA said, stocks of propane, natural gas, and coal have reached very high levels as demand fell much more than supply. Propane inventories have been running well above typical levels during this year and currently stand at 73.0 million bbl as of the week-ended Sept. 25, which is 14 percent above the five-year average.

At 3,589 billion cubic feet, natural gas in storage as of the week-ended Sept. 25 is 16 percent above the five-year average. EIA projects U.S. storage will reach about 3,840 Bcf by the end of October, significantly exceeding the previous record end-of-month stock level of 3,565 Bcf at the end of October 2007.

In June, which is the latest data available, coal stocks in the electric power sector reached a record high 198 million tons, 29 percent above June 2008 levels. The recession reduced industrial demand for electricity, and, in turn, coal consumption at electric power plants. In the first half of 2009, coal fired plants saw coal consumption drop 11 percent compared to first half 2008. Coal consumption has been further reduced by utilities switching, to the extent feasible, to natural gas generation due to relatively low natural gas prices.