For the first time since 12/3 crude broke through the $76 barrier. In its regular week advice, EIA announced greater than expected draws on crude and products inventory and analysts took this to mean that economic activity was increasing. The inventory decrease has more to do with end of the year tax preparation by refiners as they work the LIFO layers of their inventories. Refiners have also been using up inventories and generating as much cash as possible because of the year's end only next week.
The low level of inventory and imports has nothing to do with supply disruptions as it has in other years and everything to do with year end tax prep and also with the depressed level of crack spreads. Refiners have cut back on utilization and imports, are layoffs not far off if spreads and demand don't start improving?
For the day, crude +$2.42, gasoline +7.33 cents, distillate +6.4 cents.
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