Today's report on oil and gasoline inventories was for the most part as expected. Oil imports recovered compared to last week, rising 1.1 million barrels per day to 9.2 million barrels per day. It is possible that last weeks number was an odd ball, especially with no specific weather or news related event that could back up the low number of imports.

Oil stockpiles increased, although not as much as expected, but the big picture continues to be that stocks are still nearly 15% higher than a year ago and the driving season is just over a week from concluding.

Gasoline stockpiles decreased by 1.7 million barrels, in line with expectations. Look for gasoline stocks to continue to shed barrels as winter spec gasoline begins trading and refiners try and offload their current summer spec inventories. Remaining stocks of summer blended/EPA required fuels are moving and we may see some wild price swings down and up in the closing weeks. Some areas may have too much summer spec fuel while others will be faced with a close call as some major refiners begin plant maintenance that will last into fall.

Stocks of distillate fuels increased more than expected, rising 800,000 barrels last week. The expectation was for a smaller 250,000 barrel increase, but the larger increase will help temper bulls looking for a reason to buy ahead of the heating oil season.

Demand continues to lag compared to last year, but is up after hitting recent lows. Total products supplied is again over 19 million barrels per day (down by 1% vs. last year), while gasoline demand is nearly the same. The major demand story continues to be distillate and jet fuel, with both products suffering from rampant demand destruction. Distillate demand is off nearly eight percent vs. last year while jet fuel demand is off twelve percent. Jet fuel demand continues to astonish me- even last year jet fuel demand was already suffering and it continues to crumble as less take to the skies and fleets become more fuel efficient.

This report will likely be a non-event for today's trading thanks to an absence of surprises. Prices may continue to drop as we move away from the more expensive summer blended fuel and benefit from the continued absence of threats to the U.S. from tropical storms.