After reading this morning's DOE report on oil and refined product inventories, it would seem that retail gasoline prices will increase slightly the next few days as higher prices on the market today make their way to pumps.
The report this morning was quite bullish, showing a reduction in oil, gasoline, propane, and distillate fuel inventories, with an overall loss of over 12 million barrels of oil products. This comes at a time when traders are eagerly waiting to pounce on news to get back into the market, and today might be that day. (READ MORE... See what prices did over Thanksgiving!)
Oil prices are currently $2.50/barrel higher to over $73, while wholesale gasoline prices are up 5-cents per gallon and distillate (diesel, heating oil) prices are up 6.5-cents per gallon. It would seem that the increase in prices right now is a bit far fetched. The report wasn't that poor, but it is likely there are speculators getting back in after oil traded below $70.
The current national average stands at $2.59, having fallen since December 4, when the average was $2.64. Prices by Christmas will likely stay in the $2.57-$2.64 range before falling after the New Year.
Highlights of the report:
Crude inventories fell 3.7 million barrels
Gasoline inventories rose 900,000 barrels
Distillate inventories fell 2.9 million barrels
Propane inventories fell 4.0 million barrels
Total oil demand averaged 18.8 million barrels per day, 1.7% lower than last year
Total gasoline demand last week was 0.2% higher than last year
Overall, this report shows strength in distillate, which may reflect a growing economy or cold weather, but overall demand remains lower. Inventories of all products are more in-line than they have been, and generally, supplies are shrinking to slimmer numbers, something that likely pleases OPEC (and OPEC only).
Also, I went back to our lovely GasBuddy historical price charts (these are always fun to play with and see how prices work over a holiday). Here is what the national average did over the Thanksgiving holiday.