Finally! It seems it's been quite some time since the DOE report showed good numbers in all categories. This week's report is likely to push oil prices down as supply increases while demand decreases.
The Department of Energy report showed that crude inventories rose 1.8 million barrels, leaving supply nearly 8% higher than a year ago. Good news for gasoline inventories as well, rising 2.5 million barrels against a picture of weakened demand but surprising since refinery utilization slipped under 80%. Gasoline inventories are now 7.3% higher than a year ago. Distillate (diesel/heating oil) inventories also rose, but only 300,000 barrels. This leaves distillate inventories a whopping 30% higher than a year ago.
Demand suffered compared to the last few weeks, averaging 8.9 million barrels, and down 1% compared to the same week last year. Refinery utilization dropping under 80% was quite surprising after seeing the increase in inventories. That's the lowest number I could find for all of 2009, and is comparable to the production of oil a few weeks after Ike dissipated last year.
It has yet to be seen what impact Hurricane Ida had on inventories, as a major oil port had shut for three days while the storm roared into the Gulf.
As expected, the report has given bulls a reason to temporarily get out of the market, with oil hovering near $77 and gasoline trading 5.5-cents lower at this time.
This will lead to lower prices throughout the U.S. and Canada over the weekend with prices averaging $2.625 and Canada dropping to near 101c/L.