Inventories of gasoline and distillates keep falling, down 2.8 million for gasoline in the May 11 week and down 1.0 million barrels for distillates. This is the 13th straight draw for gasoline and the sixth straight for distillates. Inventories for both are in the lower limit of their historic range.
Low supply would normally be bullish for petroleum prices if it weren't for an opposite trend in inventories of crude oil which have risen for eight straight weeks, up 2.1 million barrels in the latest week and, at 381.6 million barrels, in the upper, not lower, limit of range. But refineries are increasingly drawing on oil inventories, operating at 88.3 percent of capacity for the highest rate since September. Refinery inputs are also at the highest rate since September.
Indications on final demand, drawn here by supply in the wholesale sector, show the best level this year for gasoline which is evidence that easing prices are boosting demand. The indications on distillate demand is flat. Oil prices are rising slightly following today's report.