Today’s weekly EIA oil report shows that lower demand keeps our inventories at levels we can live with. While key products inventories gasoline, distillates and propane are all below their five-year average range, their demand is estimated to be down 3.6%, 8.5%, and 14.5% below last year’s levels, respectively. Gasoline and diesel pump prices fell at a slower rate this past week to $1.80 and $2.74 today, but they appear to have at least a few more pennies to go before they reach a bottom.
Tomorrow’s EIA natural gas storage numbers will be interesting to see as cold weather may pull down the extra inventories closer to the five-year average.
Bottom line: Oil demand continues to fall faster than oil production declines. And while it’s hard to imagine fuel prices falling to $1.50 per gallon without significantly more horrible economic news, gasoline and diesel look set to fall at least another nickel on low demand.
Tags: demand, gas price, inventories, Oil