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Wednesday, December 20, 2006

Bullish Inventory Numbers for Crude

The has the news for us...

Last week, crude stockpiles plunged by 6.3 million barrels as imports fell and production of gasoline and distillates rose. The drop, the fourth straight, was much larger than the 2.25-million-barrel decline analysts polled by Bloomberg had expected.


Refiners were able to increase their run rates overall to 90.7%, up from 89.1% the previous week, to produce more gasoline and distillates, which include fuels such as jet fuel, diesel and heating oil. Last week, gasoline supplies climbed by 1 million barrels, and distillates shot up by 1.2 million barrels.

The increase in distillates stunned analysts, who had been expecting a drop of 500,000 barrels, because they assumed colder weather and the closure of Texas and Louisiana shipping channels would shave production.

So, it sounds like a lousy time to be in heating oil. Keep your eye on gasoline, though. Gasoline stockpiles are currently about 3% below last year, and they should be building at this time of year. Instead, thanks to warmer-than-normal weather, everyone's been driving to the mall!
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