U.S. oil production is soaring, hitting the highest level in 22 years at 7.55 million barrels a day! Oh sure U.S. oil supplies fell by 2.8 million barrels but that was mainly because U.S. refiners went on a tear producing product.
While Ben Bernanke is still talking about tapering, he made it clear that his plans on tapering are not on a preset course. Oil as well is not on a preset course but at some point soon we should see oil drop about $10.
Traders were hoping Fed Chairman Ben Bernanke would provide some volatility yet instead he seemed to bring stability. What fun is that? The EIA reported that crude runs at U.S. refineries have increased steadilyto reach some of the highest levels on record.
Gas soared on Friday on a string of refining issues. Gasoline went crazy as wholesalers were stunned by strong demand. Despite near record production, supplies are tightening and refining issues are making things jumpy.
While Chicago is thrilled with being the World Champions of hockey, it is tired of being number one in gasoline prices. Just as hopes were being raised that we could see gas prices start to fall, a storm cut the power to the refinery in Lemont, Illinois.
Oil supply plunged last week by a whopping 6.3 million barrels last week. That drop was dramatic but we still are ending the month of May with supplies at a 10-year high -- as opposed to the 81-year high last week.
For oil, despite yesterday's tipper taper rally parade the market still has to overcome the fact that supply in the U.S. is overwhelming. Brent crude, though, is a bit more delicate and led the rally higher.
Against a backdrop of rising supply and a murky economic backdrop, RBOB gasoline rises up out of the ashes. Ok maybe not ashes but rising on refining and pipeline issues as we get ready to top off the tank for the upcoming kickoff to the summer driving season.