This week's release of crude oil inventories from the Department of Energy showed a larger than expected drawdown in crude oil stockpiles (-7.46 mln barrels vs -5.0 mln estimate). While crude oil inventories are still well above average, they are actually below levels we saw at this time of year in 2010. Based on the typical seasonal pattern, we should be in store for a few more weeks of declines before inventories start to build again.
(click to enlarge)While crude oil inventories are still well above normal, gasoline stockpiles are actually now below average even after this week's smaller than expected draw. While traders were looking for a drop of 3.0 mln barrels, the actual decline was only 2.334 mln. Gasoline prices are already above $4 per gallon in many parts of New York state, and if the current trends in inventories keep up, $4 gas is a price more and more consumers will have to get used to.