The Department of Energy released its weekly report on the condition of petroleum inventories in the United States at 11am today, a day later than normal because of the Memorial Day holiday.

Here are some highlights:

Crude oil inventories decreased by 1.9 million barrels to a total of 363.2 million barrels. At 363.2 million barrels, inventories are unchanged versus last year, yet remain above average. Supply at NYMEX delivery point, Cushing, Oklahoma increased some 0.3 million barrels as inventories there remain much above average, tying a record set in May. Oil at NYMEX delivery point Cushing, OK amounts to 37.9 million barrels this week.

Gasoline inventories decreased by 2.6 million barrels to a total of 219.0 million barrels. At 219.0 million barrels, inventories are 5.8% higher than last year. Decreases in gasoline inventories were seen in the Midwest (-1.2mb), the Gulf Coast (-0.9mb), and the West Coast (-0.8mb). The East Coast and Rockies posted a small gain over the last week, hopefully easing prices in those regions.

Distillate inventories increased by 0.5 million barrels to a total of 153.0 million barrels. At 153.0 million barrels, inventories are now 0.8% lower than a year ago. Demand for distillate fuel (diesel, industrial fuels) is up an average of 17.1% over the last four weeks, a huge increase as commercial use likely rises. This continues to be a main reason why retail diesel prices remain above the price of gasoline.

Refinery utilization fell slightly to 87.5%, a decrease of 0.3% over last week's numbers. Gasoline production increased compared to last week to 9.2 million barrels per day while distillate fuel production averaged 4.3 million barrels per day, also an increase over the prior week.

Overall, this report was pretty lousy and may signal that demand has strengthened and is depleting surplus inventories. Distillate demand is virtually through the roof and may see a rise of 20% by next week. This could mark a turning point and we may see a slow recovery in oil and gasoline futures.