Wow… today’s DOE report was a terrific read. I read a lot of good news from this week’s report on petroleum inventories.
As typical, let me highlight some of it:
- Oil inventories rose by 7 million barrels, pushing them into the middle of the average range
- Gasoline inventories rose by 3.6 million barrels, keeping them above the upper limit of the average range
- Huge gasoline gain DESPITE much lower refinery utilization (see cons)
- Midwest (PADD 2) inventories sit at 54.4 million barrels, their highest level since March
- Chicago Discount could slowly work out to market as storage nears its limits
- Refinery utilization slipped to 84.3% of capacity. This is the lowest I can remember in quite some time
- Distillate inventories gained virtually nothing (100,000 barrels)
Overall a good report, with the Midwest PADD being in excellent condition. We can expect to see the Chicago Discount start to appear as storage facilities near their storage limits soon. This could be anywhere from 3 to 7 cents per gallon. I don’t see any reason for a hike at this time.
Prices should work down to possibly as low as the 2.70s. We’ll see!
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