Wow! Where’d The Oil Go?

From Hard Assets Investor:

Profit-taking took crude oil lower in the overnight session as traders squared their books in anticipation of the U.S. Energy Department's weekly inventory report. Prices in the electronic market drifted downward after nearby September crude jumped $2.44 to $69.19 a barrel in the day session.

Yesterday, traders were focused on an American Petroleum Institute (API) forecast of a 6.1- million-barrel drawdown in the domestic oil stockpile. This morning, though, Oil Patch analysts' contrary guesstimate of a 1.3-million-barrel build had some raking money off the table and hedging their bets.

Analysts also expected gasoline inventories to decline by 1 million barrels, and supplies of distillate fuels, including diesel and heating oil, to increase by 400,000 barrels. The Street also guessed that refineries would operate at 83.8% of capacity.

As it turned out, the Energy Department's figures were more bullish than API figures implied. Commercial oil inventories fell by a whopping 8.4 million barrels, according to the agency. Gasoline supplies dipped by 2.1 million barrels, while distillate stocks decreased by 700,000 barrels.

Refinery utilization, at 84%, was higher than expected. Overall, gasoline production increased and distillate fuel production declined last week. Demand for gasoline is off by 0.1% from year-ago levels. Distillate fuel demand remains weak, with 13.5% less product supplied than this time last year....MORE