The bullish news about falling inventories and increased refinery utilization was overshadowed by China's raising of reserve requirement to dampen national demand and prevent an overheated economy as well as the updated weather forecasts that predict rising temperatures and thus a fall in distillate demand. Worldwide demand is so much lower this year that falling inventories do not immediately mean a need to move prices up. Chevron earnings caution also has analysts and traders thinking a little bit more bearish as downstream losses were significant.
For the day, crude -$1.97 to $80.40, gasoline -3.22 cents to $2.0907, distillate -3.83 to $2.1367. It is a sign of really low demand when distillate falls this much in the middle of winter.
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