August 19,2009

Today was full of surprises. Crude inventory down 8.4 million barrels and gasoline supplies down 2.2 million barrels. Heating oil is causing the gasoline increase even though refineries are producing at the 3:2:1 ratio for the driving season as distillate demand has fallen 9% and supplies are 23% higher. This fundamentals news caused WTI to rise 4% and gasoline also rose 4 cents. Probably with an eye towards the coming cold weather, heating oil increased 5 cents despite high supply levels. The other interesting news today was that gasoline demand was up, crack spreads were down, and refinery utilization was up. Last week all these signs foretold a falling economy. Are this week's signs predicting an improving economy?