With the latest DOE report showing the situation for the first week in the New Year, much was on the line. Would inventories rise after the New Year as deliveries resumed? Would the cold weather result in high demand?

Thankfully, we saw decent increases in crude stockpiles, gasoline, and distillate fuels. Crude saw a sizable 3.7 million barrel gain while gasoline saw a nice 3.8 million barrel gain and distillates rose 1.4 million barrels. There was one negative note- propane inventories fell 3.5 million barrels, but with the big gains in traditional products, crude oil has been holding well below $80, but in the last hour has moved slightly higher.

Typically refiners delay shipments before the New Year to avoid paying additional taxes on year-end inventories. The deliveries then arrive after the New Year and we see a sharp rise, which is exactly what happened this year.(READ MORE!)

In the last two trading sessions, wholesale gasoline has shed near ten cents per gallon, a good sign that retail prices won't rise as sharply, and may begin to fall in the next week or two, should prices hold on to losses over the next few days.

We've seen an impressive rise the last two weeks in retail prices, having gone from $2.600 on December 27 to $2.75 on January 10, an increase of fifteen cents. Two major factors were behind the increase- the cold weather, and lower supplies, as reported by the DOE. Now that we're in the New Year, we'll likely see inventories rise for the next few weeks.

We'll see if the cold weather will hamper next week's DOE report- specifically when it comes to refinery utilization. You'll remember that I reported in a recent blog post that the cold weather had impacted refiners, which may result in lower utilization numbers. We'll have to wait and see.

For this weekend, we'll likely see prices rising, albeit slower than they have, and in some areas (Speedway States), we should continue to see falling prices. The Midwest currently has some of the cheapest wholesale prices, and motorists in those areas will benefit.