Lot of news today about oil. Bloomberg reports that inventories probably fell last week. This cannot be considered the final word until the government inventory report comes out tomorrow morning as early reporting has sometimes been contradicted by the actual inventory release by the Energy Department.
Analysts are also talking about the economic recovery but this does not seem to jibe with inventory news. Both gasoline and distillate inventories grew last week. It is hard to understand how gasoline inventory could grow immediately after the Labor Day weekend. Distillate inventory increases can be attributed to refineries building stock for the coming cold weather but inventory levels are the highest in 26 years. However, this product inventory growth also comes in the face of the fall in refinery utilization.
The extra news was that OPEC seems to be talking business up by raising global demand forecasts for 2010 and 2009. Although the added 2009 demand is about demand not quite decreasing as previously forecasted.
With all this news crude futures rose $2.21/bbl, distillate increased $0.047/gallon and gasoline jumped almost 5 cents.
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