Gas & Oil News

Here in the US, there was flurry of noise yesterday about the Energy Information Administration reporting a surprisingly large increase in inventories of crude oil last week. True as it is, crude oil inventories being up to the highest level in nearly three years, dose not translate into high gasoline inventories, and lower prices at the pump. An increase in oil inventories, bought at a premium price, will not bring down the price of a gallon of gasoline. Further more, what good is a surplus of crude oil if the US doesn't have the refinery capacity to turn it into gasoline! US refineries are in the process changing from winter blends to summer blends of gasoline. During this transition, gasoline production is low. On a good day, with all of the United States refineries running at 90 to 95% production capacity, they can barely keep up with demand. Therefore, the upward price pressure on a gallon of gasoline is here to stay for a while!
Davitte’ Lanier
Petroleum Industry Analyst