The EIA reported today that the whole fuel inventory complex is down significantly from last year and below the five-year average. Gasoline supplies are at their lowest level since detailed records began in 1981. In normal times, such a report would result in much higher prices. But these aren’t normal times as reduced demand continues to be the savior of 2008 for lowering prices and keeping our inventories above minimum operating levels.
However, next week’s report will test the ability of lower demand to make up for even lower supplies. Crude supplies will most likely fall below 290 Mb with gasoline supplies falling the farthest, potentially below (more…)