Falling Oil=Rising Refining Margins

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...Calls for product inventories, however, were off base again. Gasoline inventories, which were expected to rise by 1.3 million barrels, instead fell by 1.5 million. A 700,000-barrel build in distillate fuel stocks, including diesel and heating oil, was forecast, but fuel inventories rose by 2.3 million barrels...

The petroleum complex nosed higher in Tuesday's overnight trading, mainly on technical short covering, as traders readied themselves for the Energy Department's weekly oil inventory report. Calls made by upstairs analysts for a 1.6 million-barrel build in crude oil inventories seemed to be discounted. When the numbers came out Wednesday morning, crude oil stocks had indeed increased, but by only 500,000 barrels. If Oil Patch analysts were wrong on the number, at least they were aiming their forecasts in the right direction.

If there's a forecast the experts can defend, it's that for refinery usage. The green-eyeshade set was pretty much on the money again this week on refining operations. Last week's capacity utilization, says the Energy Information Administration, was 85.3%, just two-tenths of a percent above industry expectations.

Calls for product inventories, however, were off base again. Gasoline inventories, which were expected to rise by 1.3 million barrels, instead fell by 1.5 million. A 700,000-barrel build in distillate fuel stocks, including diesel and heating oil, was forecast, but fuel inventories rose by 2.3 million barrels...

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