A bullish report by the EIA showing declines in inventories of crude oil, gasoline, and distillates was not enough to buck the downward trend in oil prices due to a strengthening dollar and continued weak demand picture. The dollar rose to its highest this year at ~$1.435 per euro, 10.5% stronger than the July high of $1.6038 per euro. Next week’s report will show the impact of Hurricane Gustav. Since most refineries and crude production facilities are still offline, I guestimate that the numbers will come out very bullish with losses that bring crude, gasoline, distillates and propane near record lows for this time of year. The fact that oil rigs are not as damaged as post-Katrina and Rita is very fortunate, but (more…)