Prices fell today for crude and products as demand data, inventory levels, and refinery utilization rates were made public. Since Tuesday's close at $79, crude has fallen 4.1%. Prices fell even though national inventories dropped below the anticipated supply increase as it was realized all of the inventory decline was on the West Coast which is isolated from the supply stream of the rest of the country. Distillate stocks also fell but gasoline increased substantially over expectations insuring that there would be a lot of caution about investing in increased prices for abundant product. Prices continued to trade low when the bad economic news was revealed later in the day.
The fall of distillate is interesting because we still have at least another month of cold weather and distillate stocks have been falling. Traders have fixated, however, on average inventory levels and those remain higher than a twenty year average indicating abundant stock for weak demand. The fall in gasoline demand means people are driving their cars less. The relative weak demand for distillate means that fewer trucks are moving goods around the country and fewer jets are flying passengers since we have so far had a colder than average winter and heating oil demand must be up.
Today, crude -$1.35 to $75.80, gasoline -6.96 cents to $1.9769, distillate -4.01 cents to $1.981.
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