Gasoline, the kind we power our cars with, is also causing some surprise. Strong refining runs and an abundance of crude is making gasoline the weakest of the petroleum sector. Of course, as I have reported before, the pain that we experienced during the historic run up in February in gasoline prices probably is the reason that gas is falling today. Early forced maintenance and weak demand and an abundance of crude should mean that we will be in much better shape as we head into this summer driving season. Seasonal traders have been warned that this market is out of whack, so do not be surprised to see RBOB fall a lot further.
Despite the fact, the American Petroleum Institute reported a much larger than expected draw down of 5 million barrels of gasoline. The thought is that reflecting the removal of the winter blend will soon be replaced with ample summer blends. Dow Jones reported that, "Reformulated gasoline blendstock for May delivery settled 6.07 cents, or 2%, lower at $3.0408 a gallon, the lowest finish for the front-month contract since February 25."
Heating oil stocks fell 1.9 million barrels in another unseasonal draw that is another reason the spread won't work. Trading the calendar now is a losing proposition. Crude stocks fell in Cushing Oklahoma.