For those who aren't aware, the U.S. Department of Energy releases a report most Wednesday mornings about 10:30am. This report contains vital information on the amount of petroleum products the U.S. consumes and produces and has a large effect on oil and wholesale prices every Wednesday.

Today's DOE report was a shock to me and perhaps many others who weren't expecting such large increases in inventories. Usually when stocks of oil go up, stocks of finished products (such as gasoline) fall. This week was quite the opposite. Let me highlight some of the numbers from this week's report.

Crude oil inventories rose 2.8 million barrels.
Gasoline inventories rose 5.4 million barrels.
Distillate inventories rose 3.0 million barrels.
Propane inventories rose 1.3 million barrels.

These numbers are all a sign of weak demand for nearly all products as we enter the fall months. Gasoline production fell to 8.9 million barrels per day while the DOE states that gasoline demand was 9.1 million barrels per day- interesting.

Gasoline is stored in multiple areas around the country, broken up into "PAD" Districts. Only one sub-district reported a drop in their own gasoline stocks- the New England sub-PADD (1A). It dropped from 4.1 million barrels of gasoline to 4.0. Hardly a drop, but it shows how some New England states are hurting as a result of a large SE Canada refinery that is undergoing maintenance. This is likely the only area of the country that will see prices rise.

Nearly every other area should see prices fall over the next few days as the market absorbs this news and wholesale gasoline and oil prices fall.

We could easily see the U.S. average fall to 2.49 in the next 4-7 days with Canadian prices falling to 99.2c/L in the same time frame. One thing is for sure, there is a large amount of downard pressure on oil prices as inventories rise and demand falls. It will be interesting to see if oil prices continue to trade in-sync with Wall Street.