by Bespoke Investment Group
This morning's release of the weekly energy inventory report from the Department of Energy (DOE) showed that crude oil stockpiles increased by 6.2 mln barrels. This represents the largest weekly increase since July 2010. As shown in the chart below, this week's increase in oil stockpiles widened the gap between current and average levels even further. Not surprisingly, oil saw a knee jerk decline, but given the way this commodity has been trading don't be surprised to see it rebound as the day goes on.
While crude oil stockpiles continue to build, inventories of gasoline have seen a rapid decline. If you are wondering why gasoline prices are near record highs, even though oil remains well below its 2008 peak, look no further than the chart below. After starting off the year at above average levels, gasoline inventories are now below average for the first time this year.
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