DOE Report: Much more balanced this week, good gains!

Highlights from today’s weekly release of the DOE Petroleum Stockpile Data:

>Refineries operated at 87.1% of capacity… a huge decrease from the week previous!
>Gasoline production dropped roughly 200,000bpd compared to last week
>Crude oil imports seem on a rebound: they averaged 10 million barrels per day, about 220,000bpd higher than the same period last year

The GOOD news:
>Crude oil inventories rose by 4.3 million barrels (first gain in months- this is a large gain as well!)
>Gasoline inventories rose by 2.2 million barrels last week to put us in the upper constraints of the average range
>Distillate inventories rose by 1.1 million barrels, but continue to be outside the lower limit of the average range

The not-so-hot news:
>Total petroleum demand is up by 2.2% over the same period last year (even with high prices!)
>Gasoline demand for last week was up 1.2% over the same period last year (again- WITH the higher prices)

Other news:
The SPR (Strategic Petroleum Reserve) added a whopping 1.5 million barrels to its reserves, the largest increase I’ve ever seen (usually very small “injections” like 50,000-200,000 barrels). The U.S. is now sitting on 698.1 million barrels in its SP Reserve. This is the highest ever, and is sure to continue to grow as we inject as much oil as possible (capacity is somewhere north of 700 million barrels)

Look for oil and gasoline to drop today as continued worries about recession and news of large gains feed the bears…
There is still concern of a hike- not because of market conditions, but because of a loss of profit margin from local retailers that have dropped prices “too fast”. Watch for a reset to 2.99-3.05!

Patrick

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